~~Table~~UNITED ~~of Contents~~STATES

~~UNITED~~SECURITIES ~~STATES~~AND EXCHANGE COMMISSION

~~SECURITIES~~WASHINGTON, ~~AND~~D.C. ~~EXCHANGE COMMISSION~~ 20549

~~WASHINGTON,~~FORM ~~D.C. 20549~~ 10-K

~~FORM~~x ~~10-K~~ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

xFor ~~ANNUAL~~the ~~REPORT~~fiscal ~~PURSUANT~~year TOended ~~SECTION~~September 30, ~~13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~2013

~~For the fiscal year ended September 30, 2012~~ OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

¨ For ~~TRANSITION~~the ~~REPORT~~transition ~~PURSUANT~~period ~~TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~from to .

~~For~~Commission ~~the~~File ~~transition~~Number ~~period from to .~~ 0-11480

~~Commission~~BIOVEST ~~File~~INTERNATIONAL, ~~Number 0-11480~~ INC.

~~BIOVEST~~(Exact ~~INTERNATIONAL,~~name ~~INC.~~of registrant as specified in its charter)

(Exact name of registrant as specified in its charter)

Delaware	41-1412084
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Delaware		41-1412084
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

300 South Hyde Park Avenue, Suite 210

Tampa, Florida 33606

(Address of principal executive offices) (Zip Code)

(813) 864-2554

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.01 per share

(Title of class)

~~324~~Indicate ~~South~~by ~~Hyde~~check ~~Park~~mark ~~Avenue~~if the registrant is a well-known seasoned issuer, ~~Suite~~as ~~350~~defined in Rule 405 of the Securities Act. Yes ¨ No x Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

~~Tampa,~~Large ~~Florida~~accelerated ~~33606~~filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (~~Address~~as ofdefined ~~principal~~in ~~executive~~Rule ~~offices~~12b-2 of the Act). ~~(Zip~~Yes ~~Code~~¨ No x Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a Bankruptcy Plan confirmed by the Bankruptcy Court. Yes x No ¨ The aggregate market value of the voting common stock held by non-affiliates of the registrant, computed by reference to the closing price as of the last business day of the registrant’s most recently completed second fiscal quarter, March 29, 2013, was approximately $6.7 million. The registrant has no non-voting common stock. On July 9, 2013, as a result of the registrant’s plan of reorganization becoming effective, the registrant’s common stock ceased being quoted on the OTCQB Market. The number of shares of the registrant’s common stock outstanding as of December 27, 2013 was 100,000,000 shares of common stock, all of one class.

~~(813) 864-2554~~ DOCUMENTS INCORPORATED BY REFERENCE: NONE

~~(Registrant’s~~Forward-Looking ~~telephone number, including area code)~~ Statements

~~Securities~~Statements ~~registered~~in ~~pursuant~~this Annual Report on Form 10-K that are not strictly historical in nature are forward-looking statements. These statements may include, but are not limited to, ~~Section 12~~statements about: the timing of the commencement, enrollment, and completion of our clinical trials for our product candidates; the progress or success of our product development programs; the status of regulatory approvals for our product candidates; the timing of product launches; our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others; and our estimates for future performance, anticipated operating losses, future revenues, capital requirements, and our needs for additional financing. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” “goal,” or other variations of these terms (gincluding their use in the negative) or by discussions of strategies, plans or intentions. These statements are only predictions based on current information and expectations and involve a number of risks and uncertainties. The underlying information and expectations are likely to change over time. Actual events or results may differ materially from those projected in the ~~Act:~~forward-looking statements due to various factors, including, but not limited to, those set forth under the caption “Risk Factors” in “ITEM 1A. RISK FACTORS” in this Annual Report on Form 10-K for the fiscal year ended September 30, 2013 and those set forth in our other filings with the Securities and Exchange Commission. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

~~Common~~PART ~~Stock, par value $0.01 per share~~ I

~~(Title~~ITEM of1. ~~class)~~ BUSINESS

~~Indicate~~In bythis ~~check~~Annual ~~mark~~Report ifon Form 10-K, unless the ~~registrant~~ iscontext aindicates ~~well~~otherwise, references to “Biovest,” “the Company,” “our Company,” “we,” “us,” and similar references refer to Biovest International, Inc. and its wholly-~~known~~owned ~~seasoned~~subsidiaries, ~~issuer~~Biovest Europe, asLtd. ~~defined~~and ViraCell Advanced Products, LLC. All references to years in ~~Rule~~this ~~405~~Annual ofReport ~~the~~on ~~Securities Act~~Form 10-K, unless otherwise noted, refer to our fiscal years, which end on September 30. ~~Yes ¨ No x~~ For example, a reference to “2013” or “fiscal 2013” means the 12-month period ended September 30, 2013.

~~Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x~~ Overview

~~Indicate by~~Biovest ~~check~~is ~~mark~~a ~~whether~~biotechnology ~~the~~company ~~registrant~~focused ~~(1) has~~on ~~filed~~developing ~~all~~and ~~reports~~commercializing ~~required~~BiovaxIDTM, toas bea ~~filed~~personalized bytherapeutic ~~Section 13~~cancer orvaccine ~~15(d)~~for the treatment of B-cell blood cancers; the ~~Securities~~continued ~~Exchange~~development, ~~Act~~commercialization, manufacture and sale of ~~1934~~AutovaxID® ~~during~~and other instruments and disposables; and the ~~preceding~~commercial ~~12 months~~sale ~~(or~~and ~~for~~production ~~such~~of ~~shorter~~cell ~~period~~culture ~~that~~products and services. We were incorporated in Minnesota in 1981, under the ~~registrant~~name Endotronics, Inc. In 1993, our name was ~~required~~ changed to ~~file~~Cellex ~~such~~Biosciences, Inc. ~~reports)~~In 2001, ~~and~~we ~~(2) has~~changed ~~been~~our ~~subject~~corporate name to ~~such~~Biovest ~~filing~~International, ~~requirements~~Inc. ~~for~~and ~~the~~changed ~~past~~our ~~90 days. Yes x No ¨~~state of incorporation from Minnesota to Delaware.

~~Indicate~~As bya ~~check~~result ~~mark~~of ~~whether~~our collaboration with the ~~registrant~~National ~~has~~Cancer ~~submitted~~Institute ~~electronically~~(“NCI”), ~~and~~we ~~posted~~are ondeveloping ~~its corporate~~BiovaxID ~~Web~~as ~~site~~a personalized therapeutic cancer vaccine for the treatment of non-Hodgkin’s lymphoma (“NHL”), ifa ~~any~~B-cell cancer, ~~every~~specifically, ~~Interactive~~follicular ~~Data~~lymphoma ~~File~~(“FL”) ~~required~~and mantle cell lymphoma (“MCL”), and potentially other B-cell cancers. Both FL and MCL are generally considered to be ~~submitted~~incurable with currently approved therapies. These generally fatal diseases arise from the lymphoid tissue and ~~posted~~are ~~pursuant~~characterized toby ~~Rule~~an ~~405~~uncontrolled proliferation and spread throughout the body of ~~Regulation~~mature SB-Tcells, ~~during~~which ~~the~~are ~~preceding~~a ~~12 months~~type of white blood cell. Three clinical trials conducted under our investigational new drug application (or“IND”) ~~for~~have ~~such~~studied ~~shorter~~BiovaxID ~~period~~in ~~that~~NHL. ~~the~~These ~~registrant~~studies ~~was~~include ~~required~~a toPhase ~~submit~~2 clinical trial and ~~post such~~a ~~files)~~Phase 3 clinical trial in patients with FL, as well as Phase 2 clinical trial in patients with in MCL. ~~Yes x No ¨~~ We believe that these clinical trials demonstrate the safety and efficacy of BiovaxID.

~~Indicate~~Based byon ~~check~~our ~~mark~~scientific ifadvice ~~disclosure~~meetings ofwith ~~delinquent~~multiple ~~filers~~European ~~pursuant~~Union to(“EU”)-Member ~~Item 405~~national medicines agencies, on June 13, 2012 we filed our formal notice of ~~Regulation S-K~~intent isto ~~not~~file ~~contained~~a ~~herein~~marketing authorization application (“MAA”) with the European Medicines Agency (“EMA”) which began the EU marketing approval application process. Subsequently, ~~and~~on ~~will~~December ~~not~~3, be2013, ~~contained~~we submitted an MAA with the EMA for BiovaxID. Additionally, based on a scientific advice meeting conducted with Health Canada, we announced plans to file a new drug submission application (“NDS”) seeking regulatory approval in Canada. We also conducted a formal guidance meeting with the ~~best~~U.S. Food and Drug Administration (“FDA”) in order to discuss the path for our filing of ~~registrant~~a biologics licensing application (“BLA”) for BiovaxID’s ~~knowledge~~U.S. regulatory/marketing approval. As a result of this guidance meeting, in ~~definitive~~we ~~proxy~~plan orto ~~information~~conduct ~~statements~~a ~~incorporated~~second byPhase ~~reference~~3 inclinical ~~Part~~trial ~~III~~to ofcomplete ~~this~~the ~~Form 10-K~~clinical ordata ~~any~~gained ~~amendment~~through our first Phase 3 clinical trial and our BiovaxID development program to ~~this~~support ~~Form 10-K~~our filing of our BLA for BiovaxID. xWe are preparing to initiate this second Phase 3 clinical trial, subject to required funding.

~~Indicate~~To bysupport ~~check~~our ~~mark~~planned ~~whether~~commercialization of BiovaxID and to support the ~~registrant~~products isof apersonalized ~~large~~medicine ~~accelerated~~and ~~filer~~particularly, anpatient ~~accelerated~~specific ~~filer~~oncology products, we developed and commercialized a ~~non~~fully automated, reusable instrument that employs a fully disposable, closed-~~accelerated~~system ~~filer~~cell-growth chamber incorporating a hollow fiber cell-growth cartridge called AutovaxID. Since it is fully enclosed, orcomputer controlled and automated, AutovaxID requires limited supervision and manpower to operate, compared to manual instruments. AutovaxID is suitable for growing antibody-secreting cell lines, including hybridomas and Chinese hamster ovary (“CHO”) cells, which are among the leading kinds of cell lines used for commercial therapeutic protein manufacture. AutovaxID has a ~~smaller reporting company~~small footprint and supports scalable production. ~~See~~We plan to utilize the ~~definitions~~AutovaxID technology to streamline the commercial manufacture of ~~“large~~BiovaxID. We ~~accelerated~~believe ~~filer”,~~that AutovaxID is the first cell culture system that enables production of personalized cell-based treatments economically. AutovaxID uses a disposable production unit which provides for robust and dependable manufacturing while complying with the industry current good manufacturing practices (“~~accelerated~~cGMP”) ~~filer~~standards. We are collaborating with the U.S. Department of Defense (“DoD”) and others to further develop AutovaxID and related hollow fiber systems and to explore potential production of additional vaccines, including vaccines for viral indications such as influenza and ~~“smaller~~other ~~reporting~~contagious ~~company”~~diseases. We also manufacture instruments and disposables used in ~~Rule 12b-2~~the hollow fiber production of ~~the~~cell ~~Exchange~~culture ~~Act~~products. We manufacture mammalian cell culture products such as whole cells, recombinant and secreted proteins, and monoclonal antibodies for third parties, primarily researchers. We have produced over 7,000 cell based products for an estimated 2,500 researchers around the world. We consider our vast experience in manufacturing small batches of different cell based products, together with our expertise in designing and manufacturing instruments for personalized medicines as important competencies supporting our development of patient specific immunotherapies.

~~Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company x~~1

~~Indicate~~Corporate ~~by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x~~ Overview

~~Indicate~~In byApril ~~check~~2003, ~~mark~~we ~~whether~~entered into an investment agreement with Accentia Biopharmaceuticals, Inc. (“Accentia”). As a result of this agreement, in June 2003, we became a subsidiary of Accentia through the ~~registrant~~sale ~~has~~of ~~filed~~shares ~~all~~of ~~documents~~our authorized but unissued common and ~~reports~~preferred ~~required~~stock torepresenting beapproximately ~~filed~~81% byof ~~Section~~our equity outstanding immediately after the investment. The aggregate investment commitment initially received from Accentia was $20 12million. Following Accentia’s investment, 13we orcontinued 15to be a reporting company under Section 12(dg) of the Securities Exchange Act of 1934, ~~subsequent~~as toamended (the ~~distribution~~“Exchange ofAct”) ~~securities~~and ~~under~~we have filed our periodic and other reports with the Securities and Exchange Commission (“SEC”) following Accentia’s investment. As a result of the 2013 Bankruptcy Case (discussed below), as of July 9, 2013 (the effective date of the Company’s First Amended Plan ~~confirmed~~of byReorganization; the ~~Bankruptcy Court~~“Effective Date”), Accentia retains no equity ownership or debt interest in Biovest and all of our common stock previously issued and outstanding was cancelled. ~~Yes~~ ~~x No ¨~~In accordance with the Plan, new common stock of the Reorganized Company was issued as of the Effective Date to secured and unsecured creditors with allowed claims in the 2013 Bankruptcy Case.

AsThe of2013 ~~March 30,~~Bankruptcy 2012, the aggregate market value of the voting common stock held by non–affiliates of the registrant, computed by reference to the last sale price of such stock as of such date on the OTCQB, was approximately $24,700,000. Case:

AsOn March 6, 2013 (the “Petition Date”), as a result of ~~November~~ our inability to pay approximately $30 million in secured debt which had become due on November 17, 2012, ~~there~~we ~~were~~filed ~~146~~a voluntary petition to reorganize under Chapter 11 of the Bankruptcy Code,~~510~~ Case No.8:13-bk-2892-KRM,~~818~~ ~~shares~~with ofthe Bankruptcy Court (“the ~~registrant’s~~2013 ~~common stock~~Bankruptcy ~~outstanding~~Case”). During the pendency of the Chapter 11 proceedings, we operated our business as a debtor-in-possession in accordance with the provisions of Chapter 11.

~~DOCUMENTS~~On ~~INCORPORATED~~June BY10, ~~REFERENCE~~2013, the Company filed its First Modification to the First Amended Plan of Reorganization (the “Plan”) with the support of its senior, secured lenders. The Plan provided for, among other things, the cancellation of all outstanding common stock, options and warrants in the Company. In addition, the Plan provided for the conversion of virtually all pre-petition debt into new common stock of the reorganized Company as follows: ~~NONE~~(i) all outstanding indebtedness due to the Company’s senior secured lenders, totaling in excess of $41.0 million, would be converted into new equity representing ninety three percent (93%) of the issued and outstanding common stock in the reorganized Company and; (ii) approximately $5.4 million of unsecured indebtedness outstanding under the Company’s prepetition unsecured debt obligations would be converted and exchanged for new equity representing seven percent (7%) of the issued and outstanding common stock in the reorganized Company.

~~Table~~On June 27, 2013 an evidentiary hearing was held to determine the validity of ~~Contents~~an unsecured claim filed by Accentia, our former majority shareholder and parent corporation. The Company had originally classified our intercompany obligation due to Accentia as a “debt subject to compromise” through our Chapter 11 proceeding. In the course of our Chapter 11 proceeding, Accentia timely filed an initial Proof of Claim for $5.0 million and later an Amended Proof of Claim in the amount of approximately $6.5 million. The Official Committee of Unsecured Creditors (the “Creditors Committee”) filed an objection to the Accentia Claim, and after the June 27th hearing the United States Bankruptcy Court for the Middle District of Florida (the “Bankruptcy Court”) upheld the objection of the Creditors Committee and denied the Accentia Claim in its entirety, ruling that Accentia’s claim be stricken and that Accentia would have no continued claim in the 2013 Bankruptcy Case.

~~Forward-Looking~~On ~~Statements~~June 28, 2013, the Bankruptcy Court entered an Order Confirming our First Amended Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (the "Confirmation Order"), which approved and confirmed the Plan. The occurrence of the Plan’s Effective Date was subject to satisfaction or waiver of certain conditions precedent including no modification or stay of the Confirmation Order or entry of other court order prohibiting the consummation of the transactions contemplated by the Plan, and all other actions and documents necessary to implement the Plan shall have been effected or executed. Each of the foregoing conditions to the effectiveness of the Plan were satisfied or waived, and the Effective Date occurred on July 9, 2013.

~~Statements~~As ~~in this Annual Report on Form 10-K that are not strictly historical in nature are forward-looking statements. These statements may include, but are not limited to, statements about: the timing~~ of the ~~commencement,~~Effective ~~enrollment~~Date, ~~and~~pursuant completion of our clinical trials for our product candidates; the progress or success of our product development programs; the status of regulatory approvals for our product candidates; the timing of product launches; our ability to ~~protect our intellectual property and operate our business without infringing upon~~ the ~~intellectual~~Confirmation ~~property rights of others; and our estimates for future performance~~Order, ~~anticipated~~common ~~operating losses~~shares, ~~future revenues~~options, ~~capital requirements,~~ and ~~our~~warrants ~~needs~~or ~~for~~other ~~additional~~rights ~~financing.~~to Inpurchase ~~some~~or ~~cases,~~acquire ~~you~~common ~~can~~shares ~~identify~~which ~~forward-looking~~existed ~~statements~~prior byto ~~terms~~Effective ~~such~~Date aswere ~~“anticipates,”~~cancelled ~~“believes,”~~without ~~“could,”~~further ~~“estimates~~liability,” ~~“expects,” “intends,”~~payment ~~“may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” “goal,”~~ or ~~other~~compensation ~~variations of these terms (including their use~~ in ~~the~~respect ~~negative)~~thereof. Our orCertificate ~~by discussions~~ of ~~strategies,~~Incorporation ~~plans~~was oramended ~~intentions. These statements are only predictions based on current information~~ and ~~expectations~~restated ~~and~~to ~~involve~~authorize athe ~~number~~issuance of ~~risks~~up ~~and uncertainties. The underlying information and expectations are likely~~ to ~~change~~50,000,000 ~~over~~shares ~~time.~~of ~~Actual~~preferred ~~events~~stock orand ~~results~~up ~~may differ materially from those projected in the forward-looking statements due~~ to ~~various factors~~300, ~~including~~000,000 ~~but~~shares ~~not~~of ~~limited~~new ~~to,~~common ~~those~~stock ~~set forth under the caption~~ (“~~Risk Factors”~~Reorganized inBiovest ~~“ITEM~~Common 1AStock”). Pursuant ~~RISK~~to ~~FACTORS” in this Annual Report on Form 10-K for~~ the ~~fiscal year ended September 30~~Plan, ~~2012 and those set forth in our other filings with the Securities and Exchange Commission. Except as required by law,~~ we ~~undertake~~issued ~~no obligation to publicly update or revise any forward-looking statements~~100,000,000 ~~whether~~shares ~~as a result~~ of ~~new~~Reorganized ~~information,~~Biovest ~~future~~Common ~~events~~Stock oras ~~otherwise.~~ follows:

~~Table~~· to the holders of ~~Contents~~allowed secured claims – 93 million shares

~~PART~~· Ito the holders of allowed unsecured claims – 7 million shares

~~ITEM1~~Also on the Effective Date, we appointed Ronald Osman, Esq. ~~BUSINESS~~as the Chairman of our Board of Directors and Eugene Grin as a member of our board of directors. Effective as of the Effective Date, Samuel Duffey, Esq. resigned as our CEO and President and we appointed Carlos F. Santos, Ph.D. as CEO. In July 2013 we formed a wholly-owned subsidiary, ViraCell Advanced Products, LLC., and Mr. Duffey was appointed as CEO and President of that subsidiary. On December 1, 2013 we appointed Robert E. Farrell, J.D. as our CFO; since that date, Brian D. Bottjer, CPA, who had been our Acting CFO and Controller, has continued in his role as our Controller. On September 15, 2013, Mark Hirschel, Ph.D. resigned as our Chief Scientific Officer.

In this Annual Report on Form 10-K, unless the context indicates otherwise, references to “Biovest,” “the Company,” “our Company,” “we,” “us,” and similar references refer to Biovest International, Inc. and its subsidiaries. All references to years in this Annual Report on Form 10-K, unless otherwise noted, refer to our fiscal years, which end on September 30. For example, a reference to “2012” or “fiscal 2012” means the 12-month period ended September 30, 2012. 2

~~Overview~~ PRODUCTS

~~Biovest is a biotechnology company focused on developing and commercializing BiovaxID™, as a personalized therapeutic cancer vaccine for the treatment of B~~BIOVAXID-~~cell~~ ~~blood~~Personalized ~~cancers;~~Therapeutic ~~the~~Cancer continued development, commercialization, manufacture and sale of AutovaxID® and other instruments and disposables; and the commercial sale and production of cell culture products and services. We were incorporated in Minnesota in 1981, under the name Endotronics, Inc. In 1993, our name was changed to Cellex Biosciences, Inc. In 2001, we changed our corporate name to Biovest International, Inc. and changed our state of incorporation from Minnesota to Delaware. Vaccine

AsThe aHuman ~~result~~Immune of our collaboration with the National Cancer Institute (“NCI”), we are developing BiovaxID as a personalized therapeutic cancer vaccine for the treatment of non-Hodgkin’s lymphoma (“NHL”), a B-cell cancer, specifically, follicular lymphoma (“FL”) and mantle cell lymphoma (“MCL”), and potentially other B-cell cancers. Both FL and MCL are generally considered to be incurable with currently approved therapies. These generally fatal diseases arise from the lymphoid tissue and are characterized by an uncontrolled proliferation and spread throughout the body of mature B-cells, which are a type of white blood cell. Three clinical trials conducted under our investigational new drug application (“IND”) have studied BiovaxID in NHL. These studies include a Phase 2 clinical trial and a Phase 3 clinical trial in patients with FL, as well as Phase 2 clinical trial in patients with in MCL. BiovaxID has demonstrated statistically significant Phase 3 clinical benefit by prolonging disease-free survival in FL patients treated with BiovaxID. We believe that these clinical trials demonstrate the safety and efficacy of BiovaxID. System

~~Based~~The onimmune ~~our~~system ~~scientific~~functions ~~advice~~as ~~meetings~~the ~~with~~body’s ~~multiple~~natural ~~European~~defense ~~Union~~mechanism ~~(“EU”)~~for identifying and killing or eliminating disease-~~Member~~causing ~~national~~pathogens, ~~medicines~~such ~~agencies~~as bacteria, weviruses, ~~filed~~or ~~our~~other ~~formal~~foreign ~~notice~~microorganisms. ofHowever, ~~intent~~with regard to ~~file~~cancer, aincluding ~~marketing~~lymphomas, ~~authorization~~the ~~application (“MAA”)~~immune ~~with~~system’s ~~the~~natural ~~European~~defense ~~Medicines~~mechanism ~~Agency~~is ~~(“EMA”)~~believed ~~which~~to ~~begins~~be ~~the~~largely EUthwarted ~~marketing~~by ~~approval~~natural ~~application~~immune ~~process. Additionally,~~system ~~based~~mechanisms onwhich aseek ~~scientific~~to ~~advice~~protect ~~meeting~~“self-cells” ~~conducted~~from ~~with~~attack. ~~Health~~In ~~Canada~~humans, wethe ~~announced~~primary ~~plans~~disease tofighting ~~file~~function aof ~~new drug~~the ~~submission~~immune ~~application~~system ~~(“NDS”)~~is ~~seeking~~carried ~~regulatory~~out ~~approval~~by inwhite ~~Canada.~~blood Wecells ~~could~~(leukocytes), ~~receive~~which amediate ~~decision~~two ~~regarding~~types EUof ~~marketing~~immune ~~and~~responses: ~~Canadian~~innate ~~regulatory~~immunity ~~approvals~~and ~~for~~adaptive ~~BiovaxID~~immunity. ~~within~~Innate 12immunity ~~months~~refers ~~after~~to the ~~submission~~broad offirst-line ~~our~~immune ~~MAA~~defense ~~and NDS assuming~~ that ~~the~~recognizes ~~rigorous~~and ~~review~~eliminates ~~process~~certain ~~advances~~pathogens ~~forward~~prior into athe ~~timely~~initiation ~~and~~of ~~positive~~a ~~manner~~more ~~and~~specific noadaptive ~~substantial~~immune ~~regulatory~~response. ~~issues~~While orthe ~~problems~~cells ~~are~~of ~~encountered.~~the Weinnate ~~also~~immune ~~conducted~~system provide a ~~formal~~first ~~guidance~~line ~~meeting~~of ~~with~~defense, ~~the~~they ~~U.S.~~cannot ~~Food~~always ~~and~~eliminate ~~Drug~~or ~~Administration (“FDA”)~~recognize ininfectious ~~order~~organisms. toIn ~~define~~some ~~the~~cases, ~~path~~new ~~for~~infections ~~our~~may ~~filing~~not ofalways abe ~~biologics~~recognized ~~licensing~~or ~~application~~detected ~~(“BLA”)~~by ~~for~~the ~~BiovaxID’s~~innate ~~U.S.~~immune ~~regulatory/marketing approval~~system. ~~Further,~~In inthese ~~its guidance~~cases, the ~~FDA~~adaptive ~~required~~immune ~~that~~response wehas ~~conduct~~evolved to provide a ~~second~~highly-specific ~~Phase~~and ~~3 clinical~~versatile ~~trial~~means toof ~~complete~~defense ~~the~~which ~~clinical~~also ~~data~~provides ~~gained~~long-lasting ~~through~~protection ~~our~~(immune ~~first~~memory) ~~Phase~~against 3subsequent ~~clinical~~re-infection ~~trial~~by ~~and~~the ~~our~~same ~~BiovaxID~~pathogen. ~~development~~This ~~program~~adaptive toimmune ~~support~~response ~~our~~facilitates ~~filing~~the use of ~~our~~preventative ~~BLA~~vaccines ~~for~~that ~~BiovaxID.~~protect Weagainst ~~are~~viral ~~preparing,~~and ~~subject~~bacterial toinfections ~~required~~such ~~funding~~as measles, topolio, ~~initiate~~diphtheria, ~~this~~and ~~second Phase~~tetanus. 3We ~~clinical~~believe ~~trial~~that toBiovaxID ~~advance~~creates ~~BiovaxID~~an ~~toward~~adaptive ~~the~~immune ~~U.S.~~response ~~market.~~to cancerous B-cells.

ToAdaptive ~~support~~immunity ~~our~~is ~~planned~~mediated ~~commercialization~~by ofa ~~BiovaxID~~subset ~~and to support the products~~ of ~~personalized~~white ~~medicine~~blood ~~and~~cells ~~particularly~~called lymphocytes, ~~patient~~which ~~specific~~are ~~oncology~~divided ~~products,~~into wetwo ~~developed~~types: B-cells and T-cells. ~~commercialized~~In athe ~~fully automated~~bloodstream, ~~reusable~~B-cells ~~instrument~~and ~~that~~T-cells ~~employs~~recognize aantigens, ~~fully~~which ~~disposable,~~are ~~closed-system~~molecules ~~cell-growth~~that ~~chamber~~are ~~incorporating~~capable of triggering a ~~hollow fiber~~response ~~cell-growth~~in ~~cartridge~~the ~~called~~immune ~~AutovaxID~~system. ~~Since~~Antigens itare ismolecules ~~fully~~from ~~enclosed~~bacterial, ~~computer~~viral, ~~controlled~~or ~~and~~fungal ~~automated~~origin, ~~AutovaxID~~foreign ~~requires~~(non-self) ~~limited~~proteins, ~~supervision~~ and ~~manpower~~in tosome ~~operate~~cases, ~~compared~~tumor-derived toproteins ~~manual~~that ~~instruments.~~can ~~AutovaxID~~stimulate isan ~~suitable~~immune ~~for~~response. ~~growing antibody-secreting~~The ~~cell~~human ~~lines,~~body ~~including~~makes ~~hybridomas~~millions ~~and~~of ~~Chinese~~different ~~hamster~~types ~~ovary~~of ~~(“CHO”)~~ B-cells, ~~which~~that ~~are~~circulate ~~among~~in the ~~leading~~blood ~~kinds~~and oflymphatic ~~cell~~systems ~~lines~~and ~~used~~perform ~~for~~immune ~~commercial therapeutic protein manufacture~~surveillance. ~~AutovaxID~~Each B-cell has a ~~small~~unique ~~footprint~~receptor ~~and~~protein ~~supports scalable~~(immunoglobulin) ~~production.~~on Weits ~~plan~~surface tothat ~~utilize~~binds ~~the AutovaxID technology~~ to ~~streamline~~one ~~the~~particular ~~commercial manufacture of BiovaxID~~antigen. WeOnce ~~believe~~a ~~that AutovaxID is the first~~ B-cell ~~culture~~recognizes ~~system~~its ~~that~~specific ~~enables~~antigen ~~production~~and ofreceives ~~personalized~~additional ~~cell-based~~signals ~~treatments economically.~~from ~~AutovaxID uses~~ a ~~disposable~~T-helper ~~production~~cell, ~~unit~~it ~~which~~can ~~provides~~proliferate ~~for robust~~ and ~~dependable~~become ~~manufacturing~~activated ~~while~~in ~~complying~~order ~~with~~to ~~the~~secrete ~~industry~~antibodies ~~current good manufacturing practices~~ (~~“cGMP”~~immunoglobulins; Ig) ~~standards.~~which Wecan ~~are~~neutralize ~~collaborating with~~ the ~~U.S. Department~~antigen ~~of Defense (“DoD”)~~ and ~~others~~target toit ~~further~~for ~~develop~~destruction. ~~AutovaxID~~T-cells ~~and~~may ~~related~~also ~~hollow~~recognize ~~fiber~~antigens ~~systems~~on ~~and~~foreign ~~to explore potential production of additional vaccines~~cells, ~~including~~whereby ~~vaccines~~they ~~for~~can ~~viral~~promote ~~indications~~the ~~such~~activation asof ~~influenza and~~ other ~~contagious~~ ~~diseases.~~white Weblood ~~also~~cells ~~manufacture~~or ~~instruments~~initiate ~~and~~destruction ~~disposables~~of ~~used in~~ the ~~hollow~~targeted ~~fiber~~cells ~~production of cell culture products~~directly. WeA ~~manufacture~~person’s ~~mammalian~~B-cells ~~cell~~and ~~culture products such as whole~~ T-cells, ~~recombinant~~can ~~and~~collectively ~~secreted~~recognize ~~proteins,~~a ~~and~~wide ~~monoclonal antibodies~~variety ~~for~~of ~~third parties~~antigens, ~~primarily~~but ~~researchers.~~each Weindividual ~~have~~B-cell ~~produced~~or ~~over 7,000~~ T-cell ~~based~~will ~~products~~recognize ~~for~~only anone ~~estimated~~specific ~~2,500 researchers around the world~~antigen. WeConsequently, ~~consider our vast experience~~ in ~~manufacturing~~each ~~small~~person’s ~~batches of different cell based products~~bloodstream, ~~together~~only ~~with~~a ~~our~~relatively ~~expertise~~few inlymphocytes ~~designing~~will ~~and~~recognize ~~manufacturing~~the ~~instruments~~same ~~for personalized medicines as important competencies supporting our development of patient specific immunotherapies~~antigen.

1Since B-cell cancers such as NHL are tumors arising from a single malignant transformed B-cell, the tumor cells in NHL maintain on their surface the original malignant B-cell’s immunoglobulin (collectively referred to as, the “tumor idiotype”) that is distinct from those found on normal B-cells. The tumor idiotype maintained on the surface of each B-cell lymphoma serves as the tumor-specific antigen for the BiovaxID cancer vaccine.

~~Table~~In many cases, including in NHL, cancer cells produce molecules known as tumor-associated antigens, which may or may not be present in normal cells but may be over-produced in cancer cells. T-cells and B-cells have receptors on their surfaces that enable them to recognize the tumor associated antigens. While cancer cells may naturally trigger a B- or T-cell-based immune response during the initial appearance of ~~Contents~~the disease, this response may be only weakly specific or attenuated in such a way that it does not fully eradicate all tumor cells. Subsequently, tumor cells gradually evolve and escape from this weak immune response and are able to grow into larger tumors. In addition, because cancer cells arise from normal tissue cells, they are often able to exploit or increase existing immune tolerance mechanisms to suppress the body’s immune response which would normally destroy them. In other cases, chemotherapy or other treatment regimens used to treat the cancer may themselves weaken the immune response and render it unable to reject and kill tumor cells. Even with an activated immune system; however, the number and size of tumors can often overwhelm the immune system.

~~Corporate~~In ~~Overview~~the case of cancer and other diseases, immunotherapies are designed to activate a person’s immune system in an attempt to combat the disease. There are two forms of immunotherapy used to treat diseases: passive and active. Passive immunotherapy is exemplified by the intravenous infusion into a patient of antibodies specific to the particular antigen. While passive immunotherapies have shown clinical benefits in some cancers, they require repeated infusions and can cause the destruction of normal cells in addition to cancer cells. An example of passive immunotherapy to treat lymphoma is monoclonal antibodies such as rituximab. An active immunotherapy, on the other hand, seeks to generate a durable adaptive immune response by introducing an antigen into a patient, often in combination with other components that can enhance an immune response to the antigen. BiovaxID is an example of active specific immunotherapy. Although active immunotherapies have been successful in preventing many infectious diseases, their ability to combat cancers of various types has been limited by a variety of factors, including the inability of tumor antigens to elicit an effective immune response, difficulty in identifying suitable target tumor antigens, inability to manufacture tumor antigens in sufficiently pure form, and inability to manufacture sufficient quantities of tumor antigens.

In April 2003, we entered into an investment agreement with Accentia Biopharmaceuticals, Inc. (“Accentia”). As a result of this agreement, in June 2003, we became a subsidiary of Accentia through the sale of shares of our authorized but unissued common and preferred stock representing approximately 81% of our equity outstanding immediately after the investment. The aggregate investment commitment initially received from Accentia was $20 million. Following Accentia’s investment, we continued to be a reporting company under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and we have filed our periodic and other reports with the Securities and Exchange Commission (“SEC”). As of September 30, 2012, Accentia owned approximately 59% of our outstanding common stock. 3

InNevertheless, ~~November~~in 2010 one active immunotherapy, weProvenge® ~~completed~~(sipuleucel-T) ~~reorganization~~developed ~~and~~by ~~formally~~Dendreon ~~exited~~Corporation, ~~reorganization~~received ~~under~~marketing ~~Chapter 11~~approval offrom the ~~U.S.~~FDA ~~Bankruptcy~~for ~~Code~~ the treatment of asymptomatic or minimally symptomatic metastatic castrate resistant (~~“Chapter~~hormone ~~11”~~refractory) asprostate acancer. ~~fully~~This ~~restructured~~represents ~~company.~~the ~~On March 19,~~first ~~2012,~~case of an active immunotherapy to successfully gain marketing approval in the U.S. ~~Bankruptcy~~In ~~Court~~March ~~for~~2011, ~~the~~a ~~Middle~~second ~~District~~active ~~of Florida~~immunotherapy, ~~Tampa~~Yervoy® ~~Division~~ (~~the “Bankruptcy Court”~~ipilimumab), ~~entered~~developed aby ~~Final~~Bristol-Myers ~~Decree~~Squibb ~~closing~~received ~~our~~marketing ~~Chapter~~approval 11from ~~proceedings.~~the ~~Through~~FDA, for the ~~provisions~~treatment of ~~our~~late-stage ~~bankruptcy~~metastatic ~~plan~~melanoma. ~~(as amended)~~In ~~(the “Plan”)~~addition to BiovaxID, ~~effective~~there onare ~~November 17,~~a ~~2010,~~number weof ~~restructured~~other ~~our~~active ~~debt~~immunotherapeutics ~~into~~for acancer ~~combination~~in various stages of ~~new~~clinical ~~debt~~trials ~~and~~that ~~equity.~~have demonstrated promising results.

OnA ~~November~~number ~~17, 2012, an aggregate~~ of ~~approximately~~features ~~$27.7 million in principal became due under (1) a secured convertible promissory note issued to Corps Real, LLC (“Corps Real”) with an aggregate principal balance~~ of ~~$3.0 million (~~the ~~“Biovest~~ ~~Corps~~NHLs ~~Real~~make ~~Note”),~~these ~~(2)~~tumors ~~secured~~particularly ~~convertible~~suitable ~~promissory~~for ~~notes~~treatment ~~issued~~with toa ~~Laurus~~therapeutic ~~Master~~cancer ~~Fund, Ltd~~vaccine. ~~(in~~The ~~liquidation),~~malignant ~~PSource~~B-cell ~~Structured Debt~~lymphocytes ~~Limited,~~of ~~Valens~~NHL ~~U.S.~~express ~~SPV~~a Iunique, ~~LLC,~~identifiable ~~Valens~~tumor-specific ~~Offshore~~antigen ~~SPV~~which I,is ~~Ltd.,~~not ~~Valens~~expressed ~~Offshore~~by ~~SPV~~other ~~II, Corp., and Erato Corp.~~ (~~collectively, “Laurus/Valens”~~healthy) ~~with~~cells anin ~~aggregate~~the ~~principal balance of $23~~body.5 ~~million~~In ~~(the “Term A Notes”)~~contrast, ~~and (3) unsecured convertible promissory notes (~~the ~~“Exchange~~majority ~~Notes”) issued to the holders~~ of ~~the~~human ~~Exit~~cancers ~~Financing~~typically ~~with~~lack anstrong ~~aggregate~~ubiquitous ~~principal~~expression ~~balance~~ of ~~$1.2~~tumor-specific ~~million~~antigens ~~(collectively, the “Matured Obligations”). Because we were unable~~ to ~~pay~~distinguish ~~the~~them ~~amount~~from ~~due~~normal ~~on November 17~~cells, ~~2012,~~or anthey ~~event~~express ~~of default occurred under the Matured Obligations. As~~ a ~~result~~potentially of our default under the Exchange Notes issued in the Exit Financing, interest has begun accruing on those Exchange Notes at rate of 15% per annum. On December 19, 2012, a majority of the holders (Whitebox Credit Arbitrage Partners, LP, Whitebox Special Opportunities Fund Series B Partners, LP, Pandora Select Partners, LP, Whitebox Multiwidely-~~Strategy~~varying ~~Partners, LP,~~mix ~~Whitebox Concentrated Convertible Arbitrage Partners, LP, (collectively, the “Whitebox Entities”))~~ of ~~the~~antigens ~~outstanding~~which ~~Exchange~~can ~~Notes~~be ~~issued~~difficult ~~in the Exit Financing commenced a breach of contract action~~ to ~~secure~~identify ~~monetary judgment(s) against us for the outstanding principal~~ and ~~interest~~formulate ~~owed~~into toa ~~them~~successful ~~(the~~therapeutic ~~“Whitebox Litigation”)~~vaccine. ~~With the exception of the Whitebox Litigation, we have not been notified of an event of default by the other holders of the outstanding Exchanges Notes.~~

~~Pursuant to cross~~Non-~~default~~Hodgkin’s provisions contained in certain of our other outstanding notes in the aggregate of approximately $0.3 million and $4.2 million, may be declared to be in default as well, and were issued to (a) the Economic Development Authority for the City of Coon Rapids (“EDA”) and the Minnesota Investment Fund (“MIF”) and (b) Laurus/Valens, respectively. We have not been notified of an event of default by the EDA and/or MIF and the standstill agreement (discussed below) precludes Laurus/Valens from declaring a cross-default under its Term B Notes. Lymphoma

~~Effective~~Non-Hodgkin’s ~~November 17,~~lymphoma ~~2012,~~(“NHL”) weis ~~entered into~~ a ~~standstill~~heterogeneous ~~agreement~~group ~~with~~of ~~Corps~~malignancies ~~Real~~of ~~and Laurus/Valens, pursuant to which (i)~~ the ~~maturity~~lymphatic ~~dates of~~system ~~the~~with ~~Corps~~differing ~~Real~~clinical ~~Note~~behaviors and ~~the~~responses ~~Term A Notes were extended from November 17, 2012~~ to ~~January 31,~~treatment. ~~2013~~BiovaxID ~~and~~has ~~(ii)~~been ~~Corps~~studied ~~Real~~in ~~and~~two ~~Laurus/Valens~~distinct ~~granted~~forms usof aNHL, ~~forbearance (until January 31~~namely, ~~2013)~~FL ~~from their exercise of the rights~~ and~~/or remedies~~ ~~available~~MCL. toNHL ~~them~~was ~~under~~ the ~~Corps~~seventh ~~Real~~most ~~Note,~~common ~~Term~~type Aof ~~Notes~~cancer ~~and~~in ~~Term~~the ~~B Notes~~U.S. ~~The~~in ~~standstill~~2011 ~~agreement~~(Lymphoma ~~allows us the time~~ and ~~opportunity~~Leukemia toSociety- ~~negotiate~~Facts 2012), with ~~Corps~~an ~~Real~~estimated ~~and~~prevalence ~~Laurus/Valens~~of a484,336 ~~potential~~cases ~~restructuring~~in of2011 in the ~~Corps~~U.S. ~~Real Note~~(Surveillance, ~~Term A Notes~~Epidemiology, and ~~Term~~End BResults- ~~Notes.~~SEER IfStat weFact ~~default~~Sheets: ~~under~~Non-Hodgkin’s ~~the~~Lymphoma). ~~Corps~~NHL ~~Real~~accounts ~~Note~~for ~~following~~3% ~~the expiration~~ of ~~the~~all ~~period~~cancer ~~covered~~deaths byin the ~~standstill~~U.S. ~~agreement,~~(American ~~Corps~~Cancer ~~Real~~Society- ~~will~~Facts ~~have~~and ~~the~~Figures ~~right~~2012). toNHL ~~foreclose~~is ~~upon~~one ~~its~~of ~~first~~the ~~priority~~few ~~security~~malignancies ~~interest~~ in ~~all~~which ofthere ~~our~~continues ~~assets. If~~to webe ~~default~~a ~~under~~rise ~~the~~in ~~Term~~incidence. ASince ~~Notes following~~ the ~~expiration~~early of1970’s, ~~the~~incidence ~~period~~rates ~~covered~~for byNHL ~~the~~have ~~standstill~~nearly ~~agreement~~doubled. Moreover, ~~Laurus/Valens~~in ~~(a)~~spite ~~will have right to foreclose upon their lien on all~~ of ~~our~~recent ~~assets~~advances ~~(which~~in ~~is subordinate only to~~ the ~~security~~standard ~~interest~~ of ~~Corps~~care, ~~Real)~~the ~~and~~overall ~~(b) may appoint one~~five-~~third~~year ofsurvival ~~the~~rate ~~total~~remains ~~membership~~at ofapproximately ~~our Board of Directors~~63%. ~~The~~In ~~outcome~~2012, ofit ~~the~~is ~~negotiations~~estimated ~~relating~~that to70,130 ~~the~~new ~~restructuring~~cases of ~~the~~NHL will ~~Matured~~be ~~Obligations~~diagnosed and 18,940 ~~which~~Americans will ~~may~~die ~~include~~from the ~~remainder~~disease of(American ~~our~~Cancer ~~outstanding~~Society- ~~debt, may~~Facts ~~negatively affect Accentia’s ownership interest in us~~ and ~~cause~~Figures ~~Accentia’s~~2012), ~~potential~~with ~~deconsolidation/loss~~a ofcomparable ~~control~~number estimated in usEurope.

~~Effective~~NHL ~~December 3,~~is ~~2012,~~usually weclassified ~~issued~~for anclinical ~~additional~~purposes ~~secured~~as ~~promissory~~being ~~note~~either to“indolent” ~~Corps~~or ~~Real~~“aggressive,” ~~which~~depending ~~provides~~on ushow ~~with~~quickly ~~a revolving line of credit in~~ the ~~principal~~ ~~amount~~cancer ofcells upare likely to ~~$1.5~~grow ~~million~~and ~~(the “Corps Real LOC”)~~spread. The ~~advances~~indolent, ~~under~~or ~~the~~slow-growing, ~~Corps~~form ~~Real~~of ~~LOC~~NHL ~~can~~has ~~only~~a bevery ~~used~~slow togrowth ~~sustain our business operations. The Corps Real LOC accrues interest at the~~ rate ~~of 16% per annum~~ and ~~matures~~may onneed ~~the first~~little ~~anniversary~~or ofno ~~the~~treatment ~~closing~~for ofmonths ~~the~~or ~~Corps~~possibly ~~Real LOC~~years. The ~~Corps~~aggressive, ~~Real~~or ~~LOC~~fast-growing, isform ~~secured by a first priority lien~~ of ~~all~~NHL ~~our~~tends ~~assets~~to grow and ~~the~~spread ~~Laurus/Valens~~quickly ~~Term A Notes~~ and ~~Term~~cause Bsevere ~~Notes~~symptoms, ~~are now subordinate in right of payment~~ and ~~priority~~patients towith ~~the payment~~aggressive inNHL ~~full~~have ofshorter ~~the~~overall ~~Corps~~survival ~~Real LOC~~(“OS”).

~~PRODUCTS~~ Follicular Lymphoma

~~BIOVAXID™—Personalized~~Indolent ~~Therapeutic~~(slow ~~Cancer~~growing) ~~Vaccine~~ and aggressive (fast growing) NHL each constitute approximately half of all newly diagnosed B-cell NHL, and roughly half of the indolent B-cell NHL is follicular lymphoma (“FL”). Accordingly, approximately 22% of new cases of NHL fall into the category of disease known as indolent FL, which translates in about 106,550 cases in 2011 in the U.S. (Surveillance, Epidemiology, and End Results- SEER Stat Fact Sheets: Non-Hodgkin’s Lymphoma). We have conducted a Phase 2 clinical trial followed by a Phase 3 clinical trial in FL under our IND. FL is a form of NHL that is derived from a type of cell known as a follicle center cell. Despite its slow progression, FL is almost invariably fatal. According to data from 2003-2009 from 18 SEER areas, the 5-year relative survival rate in FL patients is 85.4%. According to a recent publication based on data from patients treated at Stanford University during 1997-2003 (Tan et al., Blood 2013), after the introduction of rituximab OS in patients with grade 1-2 FL (i.e., indolent lymphoma) reached 72% at 10-years. This improvement in OS was attributed to better supportive care and effective therapies for relapsed disease.

The ~~Human~~current ~~Immune System~~standard of care for treatment of advanced, bulky FL (bulky Stage II, Stage III-IV) as specified by the National Comprehensive Cancer Network (“NCCN”) includes initial treatment of newly-diagnosed patients with rituximab-containing chemotherapy. Rituximab is a monoclonal antibody (an immune protein capable of selectively recognizing and binding to a molecule) which targets a protein primarily found on the surface of both healthy and cancerous B-cells, known as CD20. Accordingly, rituximab seeks to bind and destroy all B-cells, including healthy B-cells, as a means of controlling the progression of FL in treated patients.

~~The~~Rituximab ~~immune~~and ~~system~~other ~~functions~~biologics ascurrently ~~the~~approved ~~body’s natural defense mechanism~~ for ~~identifying~~lymphoma ~~and~~are ~~killing~~characterized oras ~~eliminating disease-causing~~“passive ~~pathogens,~~immunotherapies”. ~~such~~Following ~~as bacteria~~administration, ~~viruses,~~rituximab orexerts ~~other~~its ~~foreign~~effects ~~microorganisms.~~primarily ~~However,~~through ~~with~~an ~~regard~~unselective toand ~~cancer,~~near ~~including~~total ~~lymphomas,~~destruction ~~the~~of ~~immune~~a ~~system~~patient’s ~~natural~~B-cells, ~~defense~~including ~~mechanism~~malignant isas ~~believed~~well toas behealthy ~~largely thwarted by natural immune system mechanisms which seek to protect “self~~B-cells~~” from attack~~. InRituximab ~~humans,~~and ~~the~~other ~~primary~~passive ~~disease~~immunotherapies ~~fighting~~are ~~function~~often ofadministered ~~the~~in ~~immune system is carried out by white blood cells (leukocytes)~~sequential, ~~which~~repeated ~~mediate~~doses ~~two types of immune responses: innate immunity and adaptive immunity. Innate immunity refers~~ to ~~the~~achieve ~~broad~~their ~~first-line~~effect, ~~immune defense that recognizes~~ and ~~eliminates~~following ~~certain~~cessation ~~pathogens prior to the initiation~~ of aadministration ~~more~~are ~~specific~~over ~~adaptive~~time ~~immune~~eliminated ~~response.~~from ~~While~~ the ~~cells~~patient’s ofcirculation ~~the innate immune system provide a first line of defense, they cannot always eliminate or recognize infectious organisms. In some cases, new infections may not always be recognized or detected~~ by ~~the~~normal ~~innate~~bodily ~~immune system~~functions. InRituximab ~~these~~is ~~cases,~~characterized ~~the~~as ~~adaptive immune response has evolved to provide~~ a ~~highly-specific~~targeted ~~and~~therapy ~~versatile~~since ~~means~~it oftargets ~~defense~~CD20, which ~~also~~is ~~provides~~present ~~long-lasting~~on ~~protection~~both ~~(immune~~healthy ~~memory)~~and ~~against~~tumor ~~subsequent re-infection by the same pathogen~~cells. ~~This~~Rituximab ~~adaptive~~is ~~immune~~manufactured ~~response~~in ~~facilitates~~bulk ~~the use of preventative vaccines that protect against viral~~ and ~~bacterial~~is ~~infections~~not ~~such~~considered asto ~~measles,~~be ~~polio,~~a ~~diphtheria,~~personalized ~~and tetanus~~therapy. ~~We believe that BiovaxID creates an adaptive immune response to cancerous B-cells.~~

Adaptive immunity is mediated by a subset of white blood cells called lymphocytes, which are divided into two types: B-cells and T-cells. In the bloodstream, B-cells and T-cells recognize antigens, which are molecules that are capable of triggering a response in the immune system. Antigens are molecules from bacterial, viral, or fungal origin, foreign (non-self) proteins, and in some cases, tumor-derived proteins that can stimulate an immune response. The human body makes millions of different types of B-cells that circulate in the blood and lymphatic systems and perform immune surveillance. Each B-cell has a unique receptor protein (immunoglobulin) on its surface that binds to one particular antigen. Once a B-cell recognizes its specific antigen and receives additional signals from a T-helper cell, it can proliferate and become activated in order to secrete antibodies (immunoglobulins; Ig) which can neutralize the antigen and target it for destruction. T-cells may also recognize antigens on foreign cells, whereby they can promote the activation of other white blood cells or initiate destruction of the targeted cells directly. A person’s B-cells and T-cells can collectively recognize a wide variety of antigens, but each individual B-cell or T-cell will recognize only one specific antigen. Consequently, in each person’s bloodstream, only a relatively few lymphocytes will recognize the same antigen. 4

~~Since~~By ~~B-cell~~comparison, ~~cancers~~BiovaxID ~~such~~is characterized as ~~NHL~~an ~~are~~“active ~~tumors~~immunotherapy”. ~~arising~~Active ~~from~~immunotherapies attempt to stimulate the patient’s immune system to respond to a ~~single~~disease. ~~malignant transformed~~“Specific ~~B-cell~~active immunotherapies” such as BiovaxID, ~~the~~specifically ~~tumor~~seek ~~cells~~to ininduce ~~NHL~~cellular ~~maintain~~and/or onhumoral ~~their~~immune ~~surface~~responses ~~the~~focused ~~original~~on ~~malignant~~specific ~~B-cell’s~~antigens ~~immunoglobulin~~present ~~(collectively~~on ~~referred~~a todiseased cell (such as, ~~the “~~a tumor ~~idiotype”~~ cell). ~~that~~As isa ~~distinct~~specific, ~~from~~active ~~those~~immunotherapy, ~~found~~BiovaxID ontargets ~~normal~~only the cancerous B-cells while sparing healthy B-cells. ~~The tumor~~Accordingly, ~~idiotype~~BiovaxID ~~maintained~~is onhighly ~~the~~targeted. ~~surface~~BiovaxID ofis manufactured specifically and entirely for each ~~B-cell~~patient ~~lymphoma~~and ~~serves~~is asconsidered to be a highly “personalized therapy”. If approved, BiovaxID will represent the ~~tumor-~~only specific ~~antigen~~active immunotherapeutic approved for the ~~BiovaxID~~treatment ~~cancer~~of ~~vaccine.~~FL and therefore will represent a new class of drugs that provides a new therapeutic option for patients with lymphoma.

2In February 2011, the NCCN issued treatment guidelines recognizing “consolidation therapy” as a defined treatment category for FL in first remission. Current consolidation therapy options differ from induction therapies in that they primarily seek to prolong first remission duration by consolidating the effects of induction therapy, which primarily seeks to reduce active, bulky tumor masses. The following anti-CD20 monoclonal antibody drug products are currently approved for the first-line consolidation or extended dosing in FL: Rituxan® and Zevalin® (See Figure 1). All of these treatment options are passive immunotherapies that result in profound B-cell depletion. Following the results of the Eastern Cooperative Oncology Group E4402 protocol, also called RESORT (Rituximab Extended Schedule or Re-treatment Trial), reported at the 2011 annual meeting of the American Society of Hematology (“ASH”), the NCCN revised its clinical practice guidelines on FL. The revised 2012 NCCN guidelines, which were unchanged in 2013, consider Rituxan maintenance therapy and Zevalin consolidation therapy as ‘optional’ therapeutic approaches post-induction therapy, rather than ‘recommended’ therapeutic approaches.

~~Table~~Figure ~~of Contents~~1

InFigure ~~many~~1. BiovaxID ~~cases,~~targets ~~including~~tumor-specific ~~in NHL~~idiotype, ~~cancer~~a ~~cells~~protein ~~produce~~unique ~~molecules~~to ~~known~~the as tumor~~-associated~~ ~~antigens,~~and ~~which may or may~~ not befound ~~present~~on inhealthy ~~normal cells but may be over~~(non-~~produced~~malignant) ~~in cancer cells. T-cells and~~ B-cells ~~have receptors on their surfaces that enable them to recognize the tumor associated antigens~~. ~~While~~In ~~cancer~~contrast, ~~cells~~current ~~may~~monoclonal ~~naturally trigger a B~~antibody- ~~or T-cell-~~based ~~immune~~therapies ~~response~~for ~~during~~NHL, ~~the~~including ~~initial~~rituximab ~~appearance of the disease~~(Rituxan®), ~~this~~and ~~response~~ibritumomab ~~may~~tiuxetan be(Zevalin®) ~~only~~target ~~weakly~~CD20, ~~specific or attenuated in such~~ a ~~way~~cell-surface ~~that~~protein itexpressed ~~does~~by ~~not~~both ~~fully eradicate all~~ tumor ~~cells. Subsequently, tumor cells gradually evolve~~ and ~~escape from~~healthy ~~this weak immune response and are able to grow into larger tumors~~B-cells. InAs ~~addition~~such, ~~because~~through ~~cancer~~its ~~cells~~unique ~~arise~~mode ~~from~~of ~~normal tissue cells~~action, ~~they~~BiovaxID ~~are~~represents ~~often~~a ~~able~~new totherapeutic ~~exploit~~approach ~~or increase existing immune tolerance mechanisms~~ to ~~suppress~~treating ~~the body’s immune response which would normally destroy them~~FL. In other cases, chemotherapy or other treatment regimens used to treat the cancer may themselves weaken the immune response and render it unable to reject and kill tumor cells. Even with an activated immune system; however, the number and size of tumors can often overwhelm the immune system.

InCurrent ~~the case of cancer and other diseases, immunotherapies are designed to activate a person’s immune system in an attempt to combat the disease~~U. ~~There are two forms of immunotherapy used to treat diseases: passive and active~~S. ~~Passive~~Approved ~~immunotherapy~~Consolidation isTherapies ~~exemplified~~for byNHL ~~the intravenous infusion into a patient of antibodies specific to the particular antigen. While passive immunotherapies have shown clinical benefits in some cancers, they require repeated infusions~~ and ~~can~~Urgent ~~cause~~Need ~~the~~for ~~destruction~~Alternative ofTreatment normal cells in addition to cancer cells. An example of passive immunotherapy to treat lymphoma is monoclonal antibodies such as rituximab. An active immunotherapy, on the other hand, seeks to generate a durable adaptive immune response by introducing an antigen into a patient, often in combination with other components that can enhance an immune response to the antigen. BiovaxID is an example of active specific immunotherapy. Although active immunotherapies have been successful in preventing many infectious diseases, their ability to combat cancers of various types has been limited by a variety of factors, including the inability of tumor antigens to elicit an effective immune response, difficulty in identifying suitable target tumor antigens, inability to manufacture tumor antigens in sufficiently pure form, and inability to manufacture sufficient quantities of tumor antigens. Options

~~Nevertheless, in 2010 one active immunotherapy, Provenge~~Rituxan® (~~sipuleucel-T~~rituximab): ~~developed~~Rituximab bymaintenance ~~Dendreon~~consists ~~Corporation,~~of ~~received~~administration ~~marketing~~of ~~approval~~the ~~from~~anti-CD20 ~~the~~antibody ~~FDA~~rituximab ~~for~~administered ~~the~~at ~~treatment~~a dose of ~~asymptomatic~~375 ormg/m2 ~~minimally~~every ~~symptomatic~~8 ~~metastatic~~weeks ~~castrate~~for ~~resistant~~24 months (~~hormone~~12 ~~refractory~~injections) ~~prostate~~administered ~~cancer.~~by ~~This~~IV ~~represents~~infusion ~~the~~every ~~first~~8 ~~case of~~weeks anstarting ~~active~~8 ~~immunotherapy~~weeks to± ~~successfully~~7 ~~gain~~days ~~marketing~~after ~~approval in~~ the ~~U.S.~~last Ininduction ~~March~~treatment ~~2011,~~(whether aimmuno-chemotherapy ~~second~~or ~~active immunotherapy~~rituximab, ~~Yervoy®~~ ~~(ipilimumab),~~whichever ~~developed~~is bylater). ~~Bristol-Myers~~Administration ~~Squibb~~of ~~received~~rituximab ~~marketing~~(and ~~approval~~other ~~from~~anti-CD20 ~~the~~agent) ~~FDA,~~maintenance ~~for~~extends the ~~treatment~~ ofprofound ~~late-stage~~immunosuppression ~~metastatic~~achieved ~~melanoma.~~by Ininduction ~~addition~~therapy, toas ~~BiovaxID,~~it ~~there~~targets ~~are~~the apan-B-cell ~~number~~CD20 ofprotein. ~~other~~This ~~active~~continued ~~immunotherapeutics~~dosing ~~for~~of ~~cancer~~the ininduction ~~various~~agent ~~stages~~induces ofprofound ~~clinical~~B-cell ~~trials~~depletion ~~that~~for ~~have~~the ~~demonstrated~~two-year ~~promising~~duration ~~results.~~of the regimen.

AZevalin® ~~number~~(ibritumomab oftiuxetan): ~~features~~Zevalin ofis ~~the~~an ~~NHLs~~immunoconjugate ~~make~~resulting ~~these~~from ~~tumors~~covalently-bonded ~~particularly~~anti-CD20 ~~suitable~~antibody ~~for~~ibritumomab ~~treatment~~and ~~with~~the alinker-chelator ~~therapeutic~~tiuxetan ~~cancer vaccine~~[N-[2-bi(carboxymethyl)amino]-3-(p-isothiocyanatophenyl)-propyl]-[N-[2-bis(carboxymethylamino]-2-(methyl)-ethyl]glycine. ~~The~~This ~~malignant B~~linker-~~cell lymphocytes~~chelator ofprovides ~~NHL express~~ a ~~unique~~high affinity, ~~identifiable~~conformationally ~~tumor-specific~~restricted ~~antigen~~chelation ~~which~~site isfor ~~not~~Indium-111 ~~expressed~~or byYttrium-90. ~~other~~Administration ~~(healthy)~~follows ~~cells~~induction inrituximab ~~the~~and ~~body.~~requires Inpreliminary ~~contrast,~~dosimetry ~~the~~and ~~majority~~imaging administration of ~~human~~In-111 ~~cancers~~(Day ~~typically~~1) ~~lack~~followed ~~strong~~by ~~ubiquitous~~administration ~~expression~~ of ~~tumor~~Y-~~specific~~90 ~~antigens to~~Zevalin ~~distinguish~~on ~~them~~Day ~~from~~7, ~~normal cells~~8, or ~~they~~9. ~~express~~The amaximum ~~potentially~~allowable ~~widely-varying~~dose ~~mix~~ of ~~antigens~~Y-90 ~~which~~Zevalin ~~can~~is be32.0 ~~difficult~~mCi to(1184) MBq ~~identify~~and physicians and ~~formulate~~patients ~~into~~receiving athe ~~successful~~agent ~~therapeutic~~must ~~vaccine.~~exercise radiation exposure precautions upon administering or handling the agent.

~~Non-Hodgkin’s Lymphoma~~ 5

~~Non-Hodgkin’s~~Urgent ~~lymphoma~~Need ~~(“NHL”)~~for isNew ~~a heterogeneous~~Consolidation ~~group~~Treatment ofOption ~~malignancies~~for ofNHL: ~~the~~The ~~lymphatic~~currently ~~system~~approved ~~with~~consolidation ~~differing~~agents ~~clinical~~are ~~behaviors~~no ~~and~~longer ~~responses~~recommended totherapeutic ~~treatment.~~options ~~BiovaxID™~~post-induction ~~has~~therapy ~~been~~by ~~studied~~the inNCCN ~~two~~clinical ~~distinct~~practice ~~forms~~guidelines. ofFollowing ~~NHL,~~the ~~namely,~~results FLof ~~and MCL. NHL was~~ the ~~seventh~~Eastern ~~most~~Cooperative ~~common~~Oncology ~~type~~Group ~~of cancer~~E4402 inprotocol, ~~the~~also ~~U.S.~~called inRESORT ~~2011~~ (~~Lymphoma~~Rituximab ~~and~~Extended ~~Leukemia~~Schedule ~~Society~~or Re-treatment ~~Facts 2012~~Trial), ~~with~~reported anat ~~estimated~~the ~~prevalence~~2011 annual meeting of ~~484~~ASH,~~336~~ ~~cases~~the in2012 ~~2011~~NCCN inrevised ~~the~~guidelines ~~U.S.~~include ~~(Surveillance,~~rituximab ~~Epidemiology,~~maintenance and ~~End~~radioimmunotherapy ~~Results-~~as ~~SEER Stat Fact Sheets: Non-Hodgkin~~‘optional’s ~~Lymphoma).~~therapeutic ~~NHL~~options ~~accounts for 3% of all cancer deaths in the U.S. (American Cancer Society~~post- ~~Facts and Figures 2012)~~induction. ~~NHL~~BiovaxID is ~~one~~expected ~~of the few malignancies in which there continues~~ to beoffer a ~~rise~~non-immunosuppressive inalternative ~~incidence.~~to ~~Since~~rituximab ~~the~~maintenance ~~early~~as ~~1970’s,~~a ~~incidence~~consolidation ~~rates~~therapy for ~~NHL~~FL ~~have~~and ~~nearly doubled~~MCL. ~~Moreover,~~ inBy ~~spite~~its mechanism of ~~recent~~action, ~~advances~~BiovaxID inis ~~the~~not ~~standard~~riddled ofwith ~~care,~~ the ~~overall~~risk ~~five-year~~of ~~survival~~development ~~rate~~of ~~remains at approximately 63%~~rituximab-resistance. ~~In 2012~~Thus, itBiovaxID isrepresents ~~estimated~~a ~~that~~potential ~~70,130~~novel ~~new~~option ~~cases~~for ofconsolidation ~~NHL will~~therapy bethat ~~diagnosed~~is safe and 18effective,~~940 Americans will~~ ~~die~~compatible ~~from~~with ~~the~~current ~~disease~~induction ~~(American~~regimens, and ~~Cancer~~unlikely ~~Society-~~to ~~Facts~~interfere ~~and~~with ~~Figures~~future ~~2012),~~therapies ~~with~~while apotentially ~~comparable~~increasing ~~number~~the ~~estimated~~utility inof ~~Europe.~~other therapies.

~~NHL is~~Mantle ~~usually~~Cell classified for clinical purposes as being either “indolent” or “aggressive,” depending on how quickly the cancer cells are likely to grow and spread. The indolent, or slow-growing, form of NHL has a very slow growth rate and may need little or no treatment for months or possibly years. The aggressive, or fast-growing, form of NHL tends to grow and spread quickly and cause severe symptoms, and patients with aggressive NHL have shorter overall survival (“OS”). Lymphoma

3Mantle cell lymphoma (“MCL”) is a rare, aggressive subtype of NHL characterized by short remissions and rapid progression similar to aggressive lymphomas and successive relapses, reflecting incurability similar to indolent lymphomas. The median OS for MCL has been cited as 5-7 years (Perez-Galan et al. Mantle cell lymphoma: biology, pathogenesis, and the molecular basis of treatment in the genomic era. Blood, 2011, 117:26-38). MCL represents approximately 6% of all NHL cases and worldwide there are approximately 7,800 new cases each year of which, approximately, one half are in the U.S. (see “Current treatment approaches for mantle-cell lymphoma” J Clin Oncol. Sep 10 2005 and “New approach to classifying non-Hodgkin’s lymphomas: clinical features of the major histologic subtypes.” J Clin Oncol. Aug 1998).

~~Table~~The majority of ~~Contents~~MCL patients have disseminated disease and bone marrow involvement at diagnosis. Patients’ clinical outcomes from currently available therapies are poor. Although many therapeutic regimens are capable of rendering high initial response rates, these responses are of short duration (i.e., about 20 months) and the relative survival rates of MCL patients are among the lowest compared to other types of NHL. After a patient’s first relapse, the expected disease course and prognosis is very poor, with an expected median OS of about 1-2 years. No currently available therapeutic regimens are curative.

~~Follicular~~While ~~Lymphoma~~there are several therapeutic regimens available to treat MCL patients, there currently exists no consensus standard of care for treatment of first-line relapsed MCL. As such, MCL remains incurable and it is generally considered that additional treatment options are required given this significant unmet medical need.

~~Indolent~~Currently, ~~(slow~~upon ~~growing)~~first ~~and~~diagnosis ~~aggressive~~MCL ~~(fast~~patients ~~growing)~~are ~~NHL~~often ~~each~~evaluated ~~constitute~~for ~~approximately~~eligibility ~~half~~for ofautologous ~~all~~stem ~~newly~~cell ~~diagnosed~~transplantation B-(“autoSCT”). Stem cell ~~NHL~~transplantation, ~~and~~an ~~roughly~~aggressive ~~half~~treatment ofprotocol ~~the~~consisting ~~indolent~~of Bhigh-~~cell~~dose ~~NHL~~chemotherapy, isimmunotherapy ~~follicular~~and ~~lymphoma (“FL”).~~full-body ~~Accordingly~~radiation, ~~approximately~~aims ~~22%~~to oftreat ~~new~~the ~~cases~~patient’s oftumor ~~NHL~~and ~~fall~~purge ~~into~~ the ~~category~~bone marrow of ~~disease~~lymphoma ~~known~~cells. asMCL ~~indolent~~patients ~~FL,~~who ~~which~~are ~~translates~~eligible infor ~~about~~autoSCT ~~106~~receive either R-CHOP (rituximab,~~550~~ ~~cases~~cyclophophamide, indoxorubicin, ~~2011~~vincristine, inprednisone) ~~the~~followed ~~U.S.~~by autoSCT or R-HyperCVAD (~~Surveillance~~rituximab, ~~Epidemiology~~cyclophosphamide, vincristine, doxorubicin, and ~~End~~dexamethasone ~~Results-~~alternating ~~SEER~~with ~~Stat~~rituximab ~~Fact Sheets:~~plus ~~Non-Hodgkin’s~~high ~~Lymphoma~~dose methotrexate and cytarabine) followed by observation. WeAlthough ~~have~~these ~~conducted~~therapeutic aapproaches ~~Phase~~do 2yield ~~clinical~~high ~~trial~~response ~~followed~~rates, bythey aare ~~Phase~~associated 3with ~~clinical~~high ~~trial~~rates inof FLadverse ~~under~~events ~~our~~and ~~IND~~treatment discontinuation, high risk of myelodysplastic syndrome, and high mortality rates. FLConsequently, isthe aconsiderable ~~form~~toxicity ofassociated ~~NHL~~with ~~that~~these isregimens ~~derived~~largely ~~from~~limits these options primarily to a ~~type~~select subset of ~~cell~~the ~~known~~MCL aspatients awho ~~follicle~~are ~~center~~younger ~~cell.~~and ~~Despite~~better ~~its~~fit ~~slow progression,~~to FLtolerate isthese ~~almost~~high-intensity ~~invariably fatal~~treatments. ~~The~~However, ~~median~~even OSthis ~~reported~~subset ~~for~~ultimately FLgains ~~patients~~only ~~ranges~~modest ~~between~~benefits 8from ~~and~~existing 10treatment ~~years~~options. Moreover, ~~although~~the use of these ~~figures~~more ~~may~~aggressive ~~have~~regimens ~~become~~appears ~~slightly~~not ~~higher~~to ~~within~~result ~~the~~in ~~last~~superior ~~decade~~OS as acompared ~~result~~to ofstandard ~~improvements~~therapies. inGiven that the ~~standard~~median ofage ~~care~~ for ~~FL.~~ newly diagnosed MCL patients is 60 years, less aggressive therapeutic approaches are needed.

The current standard of care for treatment of advanced, bulky FL (bulky Stage II, Stage III-IV) as specified by the National Comprehensive Cancer Network (“NCCN”) includes initial treatment of newly-diagnosed patients with rituximab-containing chemotherapy. Rituximab is a monoclonal antibody (an immune protein capable of selectively recognizing and binding to a molecule) which targets a protein primarily found on the surface of both healthy and cancerous B-cells, known as CD20. Accordingly, rituximab seeks to bind and destroy all B-cells, including healthy B-cells, as a means of controlling the progression of FL in treated patients. 6

~~Rituximab~~Development ~~and~~Status other biologics currently approved for lymphoma are characterized as “passive immunotherapies”. Following administration, rituximab exerts its effects primarily through an unselective and near total destruction of a patient’s B-cells, including malignant as well as healthy B-cells. Rituximab and other passive immunotherapies are often administered in sequential, repeated doses to achieve their effect, and following cessation of administration are over time eliminated from the patient’s circulation by normal bodily functions. Rituximab is characterized as a targeted therapy since it targets CD20, which is present on both healthy and tumor cells. Rituximab is manufactured in bulk and is not considered to be a personalized therapy. BiovaxID

ByPreliminary ~~comparison,~~studies ~~BiovaxID™~~demonstrated isthat ~~characterized~~treatment asof anpatients ~~“active~~with ~~immunotherapy”.~~NHL ~~Active~~with ~~immunotherapies~~an ~~attempt~~active toimmunotherapy ~~stimulate~~could ~~the~~allow a patient’s immune system togenerate ~~respond~~clinically tosignificant aimmune ~~disease~~responses. ~~“Specific~~These ~~active~~studies ~~immunotherapies”~~have ~~such~~been aspublished ~~BiovaxID,~~in ~~specifically~~The ~~seek~~New toEngland ~~induce~~Journal ~~cellular~~of ~~and/or~~Medicine ~~humoral~~(October ~~immune~~1992), ~~responses~~Blood ~~focused~~(May on1997), ~~specific~~and ~~antigens~~Nature ~~present~~Medicine on(October a1999). ~~diseased~~In ~~cell~~the ~~(such~~treatment asof acancer, residual tumor ~~cell). As~~cells aremaining ~~specific,~~in ~~active~~the ~~immunotherapy,~~patient ~~BiovaxID~~after ~~targets~~completion ~~only~~of ~~the~~surgery ~~cancerous~~or Banti-~~cells~~tumor ~~while~~therapy ~~sparing~~are ~~healthy~~often ~~B-cells.~~the ~~Accordingly,~~cause ~~BiovaxID~~of istumor ~~highly targeted~~relapse. ~~BiovaxID~~These isresidual ~~manufactured~~tumor ~~specifically~~cells ~~and~~cannot ~~entirely~~always ~~for~~be ~~each~~detected ~~patient~~by ~~and~~standard isimaging ~~considered~~techniques tobut their destruction may be ~~a highly~~feasible ~~“personalized~~by ~~therapy”~~active immunotherapy. IfThe ~~approved,~~use ~~BiovaxID~~of ~~will~~such ~~represent~~vaccines ~~the~~differs ~~only~~from ~~specific~~traditional ~~active~~cancer ~~immunotherapeutic~~treatment ~~approved~~in ~~for~~that the ~~treatment~~ultimate mechanism of FLaction ~~and~~against ~~therefore~~the ~~will~~tumor ~~represent~~is aindirect: ~~new~~the ~~class~~anti-tumor ofimmunity ~~drugs~~induced ~~that~~by ~~provides~~vaccination, arather ~~new~~than ~~therapeutic~~the ~~option~~vaccine itself, is ultimately responsible for ~~patients~~ ~~with~~treatment ~~lymphoma~~benefit.

In ~~February 2011~~1994, the ~~NCCN~~NCI ~~issued~~filed ~~treatment~~for ~~guidelines~~initiation ~~recognizing~~of ~~“consolidation therapy”~~an asIND afor ~~defined~~the ~~treatment~~purpose ~~category~~of ~~for~~conducting FLclinical intrial(s) ~~first~~investigating ~~remission.~~the ~~Current~~use ~~consolidation~~of ~~therapy~~BiovaxID ~~options~~in ~~differ~~NHL. ~~from~~Under ~~induction~~this ~~therapies~~IND inand ~~that~~also ~~they~~in ~~primarily~~1994, ~~seek~~the toNCI ~~prolong~~began ~~first~~the ~~remission~~Phase ~~duration~~2 byclinical ~~consolidating~~trial ~~the~~in ~~effects~~FL; ofin ~~induction therapy~~1999, ~~which~~the ~~primarily~~Phase ~~seeks~~3 toclinical ~~reduce~~trial ~~active,~~in ~~bulky~~FL; ~~tumor~~and ~~masses.~~in ~~The~~2000 ~~following~~a ~~anti-CD20~~Phase ~~monoclonal~~2 ~~antibody~~clinical ~~drug~~trial ~~products~~in ~~are~~MCL. ~~currently~~The ~~approved~~NCI ~~consolidation~~selected ~~treatment~~us ~~options~~to produce BiovaxID for the ~~treatment~~initial ofPhase ~~FL:~~2 ~~Rituxan®~~clinical ~~and~~trial ~~Zevalin®~~in ~~(See~~FL. ~~Figure~~In ~~1).~~2001, ~~All~~we ofentered ~~these~~into ~~treatment~~a ~~options~~formal ~~are~~cooperative ~~passive~~research ~~immunotherapies~~and ~~that~~development ~~result~~agreement in(“CRADA”) ~~profound~~with ~~B-cell~~the ~~depletion.~~NCI ~~Following~~which ~~the~~formalized ~~results~~our ofcollaboration with the ~~Eastern~~NCI. ~~Cooperative Oncology~~In ~~Group~~April ~~E4402 protocol~~2004, ~~also~~the ~~called~~IND ~~RESORT~~filed ~~(Rituximab~~by ~~Extended~~the ~~Schedule~~NCI orwas ~~Re-treatment~~formally ~~Trial)~~transferred to us, ~~reported~~which atmade ~~the~~our ~~2011~~Company ~~annual~~the ~~meeting~~exclusive sponsor of the ~~American~~IND ~~Society~~with offull ~~Hematology~~rights ~~(“ASH”),~~to complete the ~~NCCN~~NCI-initiated ~~revised~~Phase ~~its~~3 clinical ~~practice~~trial ~~guidelines~~in on FL. ~~The~~and ~~revised~~the ~~2012~~NCI-initiated ~~NCCN~~Phase ~~guidelines~~2 ~~consider~~clinical ~~Rituxan~~trial ~~maintenance~~in ~~therapy~~MCL, to communicate and ~~Zevalin~~negotiate ~~consolidation~~with ~~therapy~~the asFDA ~~‘optional’~~relating ~~therapeutic~~to ~~approaches~~marketing ~~post-induction~~approval ~~therapy,~~for ~~rather~~BiovaxID ~~than~~and ~~‘recommended’~~to ~~therapeutic~~conduct ~~approaches~~other clinical studies in NHL under the IND.

4BiovaxID Clinical Trials

~~Table~~Phase 2 Clinical Trial of ~~Contents~~BiovaxID for Treatment of FL

In 1994, the Phase 2 clinical trial (NCT00878488) was commenced by the NCI to evaluate the ability of BiovaxID to eradicate residual lymphoma cells in 20 patients with FL who were in chemotherapy-induced first clinical complete remission (“CR”). All 11 patients with a detectable lymphoma gene sequence (translocation) in their primary tumors had cells from the malignant clone detectable in their blood by DNA polymerase chain reaction (“PCR”) analysis both at diagnosis and after chemotherapy, despite being in CR. In this clinical trial, molecular remission was defined as patients lacking any detectable residual cancer cells bearing the translocation as determined by a very sensitive PCR technique. After vaccination, 8 of these 11 patients converted to lacking cells in their blood from the malignant lymphoma clone detectable by PCR. Anti-tumor T-cell responses were found in the vast majority of the patients (19 of 20 patients), whereas anti-tumor antibodies were detected, but apparently were not required for molecular remission. Vaccination was thus associated with clearance of residual tumor cells from the blood and long-term disease-free survival. The demonstration of molecular remissions besides uniform, specific T-cell responses against lymphoma tumor targets, as well as the addition of granulocyte-monocyte colony-stimulating factor (“GM-CSF”) to the vaccine formulation provided the rationale for the initiation of a larger Phase 3 clinical trial at the NCI in 2000. These results were published in Nature Medicine (October 1999). After a median of 9.17 years, 45% of these patients were still in continuous first CR, the median disease free survival (“DFS”) for the cohort is 96.5 months, and OS is 95% (Santos et al., ASH 2005). At the latest data follow-up after a median of 167.9 months (range: 10.0- 214.3 months) median DFS was 62.5 months (Figure 11A below) and median OS was not reached and 80% of the patients were still alive.

Figure 1. BiovaxID™ targets tumor-specific idiotype, a protein unique to the tumor and not found on healthy (non-malignant) B-cells. In contrast, current monoclonal antibody-based therapies for NHL, including rituximab (Rituxan®), and ibritumomab tiuxetan (Zevalin®) target CD20, a cell-surface protein expressed by both tumor and healthy B-cells. As such, through its unique mode of action, BiovaxID represents a new therapeutic approach to treating FL. 7

~~Current~~Figure ~~U.S.~~1A: ~~Approved~~Disease ~~Consolidation~~free ~~Therapies for NHL and Urgent Need for Alternative Treatment Options~~ survival

~~Rituxan®~~ Phase ~~(rituximab):~~2 ~~Rituximab~~Clinical ~~maintenance~~Trial ~~consists~~ of ~~administration~~BiovaxID ~~of the anti-CD20 antibody rituximab administered at a dose of 375 mg/m2 every 8 weeks~~ for 24Treatment months (12 injections) administered by IV infusion every 8 weeks starting 8 weeks ± 7 days after the last induction treatment (whether immuno-chemotherapy or rituximab, whichever is later). Administration of rituximab (and other anti-CD20 agent) maintenance extends the profound immunosuppression achieved by induction therapy, as it targets the pan-B-cell CD20 protein. This continued dosing of the induction agent induces profound B-cell depletion for the two-year duration of the regimen. MCL

~~Zevalin®~~ In ~~(ibritumomab~~2000, ~~tiuxetan):~~the ~~Zevalin~~NCI isinitiated ana ~~immunoconjugate~~Phase ~~resulting~~2 ~~from covalently~~open-~~bonded~~label ~~anti-CD20~~clinical ~~antibody~~trial ~~ibritumomab~~(NCT00020215) ~~and~~of BiovaxID for the ~~linker-chelator~~treatment ~~tiuxetan [N-[2-bi(carboxymethyl)amino]-3-(p-isothiocyanatophenyl)-propyl]-[N-[2-bis(carboxymethylamino]-2-(methyl)-ethyl]glycine~~of MCL. This ~~linker-chelator~~Phase ~~provides~~2 aclinical ~~high~~trial ~~affinity,~~was ~~conformationally~~based ~~restricted~~upon ~~chelation~~the ~~site~~NCI’s ~~for~~Phase ~~Indium-111~~2 orclinical ~~Yttrium-90~~trial in FL. ~~Administration~~ ~~follows~~The ~~induction~~primary ~~rituximab~~objective ~~and~~of ~~requires~~this ~~preliminary~~Phase ~~dosimetry~~2 ~~and~~clinical ~~imaging~~trial ~~administration~~was ofto Instudy BiovaxID in treatment-~~111~~naïve ~~(Day~~patients 1)with ~~followed~~MCL byand ~~administration~~to determine the safety and efficacy of YBiovaxID following a rituximab-90based ~~Zevalin~~immunotherapy. onTwenty-six ~~Day~~patients 7with untreated, 8mostly (92%) stage IV MCL, orwere 9enrolled. ~~The~~All ~~maximum~~patients ~~allowable~~received ~~dose~~6 cycles of YEPOCH-90R ~~Zevalin~~(which is ~~32.0~~a ~~mCi (1184~~chemo-immunotherapy consisting of etoposide, prednisone, vincristine, cyclophosphamide, doxorubicin, rituximab) ~~MBq~~; ~~and~~92% ~~physicians~~of ~~and~~the patients ~~receiving~~achieved ~~the~~CR ~~agent~~and ~~must~~8% ~~exercise~~achieved ~~radiation~~partial ~~exposure~~response ~~precautions~~(“PR”). ~~upon~~All ~~administering~~but 3 patients (i.e., due to disease progression or ~~handling~~inability to manufacture the ~~agent.~~vaccine) received BiovaxID together with keyhole limpet hemocyanin (“KLH”), an immunogenic carrier protein, on day 1, along with GM-CSF (100 µg/m2/day) on days 1-4 at 1, 2, 3, 4, and 6 months starting at least 3 months post-chemotherapy.

Urgent Need for New Consolidation Treatment Option for NHL: The currently approved consolidation agents are no longer recommended therapeutic options post-induction therapy by the NCCN clinical practice guidelines. Following the results of the Eastern Cooperative Oncology Group E4402 protocol, also called RESORT (Rituximab Extended Schedule or Re-treatment Trial), reported at the 2011 annual meeting of ASH, the 2012 NCCN revised guidelines include rituximab maintenance and radioimmunotherapy as ‘optional’ therapeutic options post-induction. BiovaxID™ is expected to offer a non-immunosuppressive alternative to rituximab maintenance as a consolidation therapy for FL and MCL. By its mechanism of action, BiovaxID is believed to eliminate the risk of development of rituximab-resistance. Thus, BiovaxID represents a potential novel option for consolidation therapy that has demonstrated to be safe and effective and, unlikely to interfere with future therapies while potentially increasing the utility of other therapies. 8

~~Mantle~~The ~~Cell~~results ~~Lymphoma~~ of our MCL Phase 2 clinical trial were reported in Nature Medicine (August 2005). As reported in Nature Medicine, after a median follow-up of 46 months, the OS was 89%, the median event-free survival (“EFS”) was 22 months, and 5 patients remained in continuous first CR. Antibody responses to immunization were detected in 30% of the patients, following a delayed pattern (i.e., detected mostly after the 4-5th vaccination) which paralleled the peripheral blood B-cell recovery. Most importantly, specific CD4+ and CD8+ T-cell responses were detected in 87% of patients post-vaccine, and in 7 of 9 patients tested these responses were detected after the 3rd vaccination when peripheral B-cells were by and large undetectable. The detected cytokine release response included GM-CSF, INF-g, and TNF-a (type I). In this study, BiovaxID induced both humoral and cellular immune responses following almost complete depletion of B-cells following rituximab-containing chemotherapy. The adverse events observed in this clinical trial were minimal and were limited mostly to injection site reactions. The results of the latest follow-up of these patients performed in 2011 were presented at the 2011 annual meeting of ASH (Grant et al., ASH 2011 Abstract #2707).

~~Mantle~~At ~~cell~~a ~~lymphoma~~median ~~(“MCL”)~~follow-up isof a99 ~~rare~~months (range, ~~aggressive~~15.2 ~~subtype~~- of131.0 ~~NHL~~months), ~~characterized~~median byPFS ~~short~~was ~~remissions~~24.1 ~~and~~months, ~~rapid~~median ~~progression similar~~OS towas ~~aggressive~~99.04 ~~lymphomas~~months, and ~~successive~~median ~~relapses,~~TTNT ~~reflecting~~was ~~incurability~~37.8 ~~similar~~months. This tomedian ~~indolent~~PFS ~~lymphomas~~of 24.1 ~~The~~months ~~median~~is OSlonger ~~for~~than ~~MCL~~the ~~has~~median ~~been~~PFS ~~cited~~for ascombination 5chemotherapy (16 -7 ~~years~~17 months) (~~Perez-Galan~~Dreyling et al., ~~Mantle~~2005; ~~cell~~Mangel ~~lymphoma:~~et ~~biology~~al, ~~pathogenesis,~~2004) ~~and~~or ~~the~~CHOP-R ~~molecular basis~~chemotherapy of(21 ~~treatment~~months) in(Lenz ~~the~~et ~~genomic era. Blood~~al, ~~2011, 117:26-38~~2005). ~~MCL~~Similarly, ~~represents~~the ~~approximately~~median 6%OS of ~~all~~99.04 ~~NHL~~months ~~cases~~greatly ~~and~~exceeds ~~worldwide~~the ~~there~~5- ~~are~~6 ~~approximately~~years ~~7,800~~obtained ~~new~~with ~~cases~~current ~~each~~therapies ~~year~~(Dreyling of& ~~which~~Hiddemann, ~~approximately~~2009), ~~one~~and ~~half~~raises ~~are in~~ the ~~U.S.~~possibility ~~(see “Current~~that ~~treatment~~BiovaxID ~~approaches~~vaccination ~~for~~modified ~~mantle-cell~~the ~~lymphoma”~~natural ~~J Clin~~history ~~Oncol. Sep 10 2005 and “New approach to classifying non-Hodgkin’s lymphomas: clinical features~~ of ~~the major histologic subtypes~~MCL.~~” J Clin Oncol. Aug 1998).~~

5The association between OS and TTNT and tumor-specific GM-CSF cytokine induction observed at this long-term follow-up and presented at the 2011 annual meeting of the ASH and at the 2012 annual meeting of the American Society of Clinical Oncology (“ASCO”) suggests that the mechanism of action of BiovaxID is T-cell mediated and not B-cell (humoral) mediated. Patients with pre-vaccine-adjusted increases in tumor-specific normalized GM-CSF cytokine induction > 4 had a significantly longer median OS (not reached vs. 78.72 months, P= 0.006; Figure 2) and longer median TTNT (68.89 vs. 27.83 months, P = 0.026; Figure 3) compared to patients with pre-vaccine-adjusted increases in tumor-specific normalized GM-CSF cytokine induction < 4. There was no association between OS and specific anti-Id B-cell (humoral) responses or any other type of specific cellular responses. Additionally, the high impact of GM-CSF cytokine response mediated by antitumor T-cells on OS and TTNT suggest that anti-tumor immune responses significantly delayed tumor growth.

~~Table~~Figure of2. ~~Contents~~Overall Survival by GM-CSF Cytokine Response (< and > than median)

The majority of MCL patients have disseminated disease and bone marrow involvement at diagnosis. Patients’ clinical outcomes from currently available therapies are poor. Although many therapeutic regimens are capable of rendering high initial response rates, these responses are of short duration (i.e., about 20 months) and the relative survival rates of MCL patients are among the lowest compared to other types of NHL. After a patient’s first relapse, the expected disease course and prognosis is very poor, with an expected median OS of about 1-2 years. No currently available therapeutic regimens are curative. 9

~~While~~Figure ~~there~~3. ~~are~~Time ~~several therapeutic regimens available~~ to ~~treat~~next ~~MCL patients, there currently exists no consensus standard of care for~~ treatment ofby ~~first~~GM-~~line~~CSF ~~relapsed~~Cytokine ~~MCL.~~Response As(< ~~such, MCL remains incurable~~ and it> isthan ~~generally considered that additional treatment options are required given this significant unmet medical need.~~ median)

~~Currently,~~Phase ~~upon~~3 ~~first~~Clinical ~~diagnosis~~Trial ~~MCL patients are often evaluated for eligibility for autologous stem cell transplantation (“autoSCT”). Stem cell transplantation, an aggressive treatment protocol consisting~~ of ~~high-dose~~BiovaxID ~~chemotherapy, immunotherapy and full-body radiation, aims to treat the patient’s tumor and purge the bone marrow of lymphoma cells. MCL patients who are eligible~~ for ~~autoSCT~~ ~~receive~~Treatment either R-CHOP (rituximab, cyclophophamide, doxorubicin, vincristine, prednisone) followed by autoSCT or R-HyperCVAD (rituximab, cyclophosphamide, vincristine, doxorubicin, and dexamethasone alternating with rituximab plus high dose methotrexate and cytarabine) followed by observation. Although these therapeutic approaches do yield high response rates, they are associated with high rates of adverse events and treatment discontinuation, high risk of myelodysplastic syndrome, and high mortality rates. Consequently, the considerable toxicity associated with these regimens largely limits these options primarily to a select subset of the MCL patients who are younger and better fit to tolerate these high-intensity treatments. However, even this subset ultimately gains only modest benefits from existing treatment options. Moreover, the use of these more aggressive regimens appears not to result in superior OS as compared to standard therapies. Given that the median age for newly diagnosed MCL patients is 60 years, less aggressive therapeutic approaches are needed. FL

~~Development~~Overview ~~Status~~and ~~of BiovaxID™~~Objectives. In January 2000, the Phase 3 clinical trial in FL (NCT00091676) was initiated by the NCI. The Phase 3 clinical trial was a multi-center, double-blind, randomized, controlled clinical trial that was designed to confirm the results reported in the NCI’s Phase 2 clinical trial.

~~Preliminary~~As ~~studies~~studied ~~demonstrated~~in ~~that~~the ~~treatment~~Phase of3 ~~patients~~clinical ~~with~~trial, ~~NHL~~BiovaxID ~~with~~consisted anof ~~active~~the ~~immunotherapy~~patient-specific ~~could~~idiotype ~~allow~~protein a (Id) derived from the patient’s ~~immune~~cancer ~~system~~cells ~~generate~~conjugated ~~clinically~~or ~~significant~~combined ~~immune~~with ~~responses.~~KLH ~~These~~and ~~studies~~administered ~~have~~with ~~been~~GM-CSF ~~published~~which inis a biological response enhancer. The ~~New~~comparator ~~England~~studied ~~Journal~~in the Phase 3 clinical trial was a control vaccine consisting of ~~Medicine~~KLH ~~(October~~and ~~1992),~~administered ~~Blood~~with ~~(May~~GM-CSF. ~~1997)~~Accordingly, the only difference between BiovaxID and ~~Nature~~the ~~Medicine~~control ~~(October~~vaccine ~~1999). In~~was the ~~treatment~~inclusion of ~~cancer,~~the ~~residual~~idiotype ~~tumor~~protein ~~cells~~from ~~remaining~~the patient’s own tumor in BiovaxID. BiovaxID or the ~~patient~~control ~~after~~vaccine ~~completion~~was ofadministered ~~surgery~~following orchemotherapy ~~anti-tumor~~(also referred to as induction therapy) ~~are~~with ~~often~~a ~~the~~drug ~~cause~~combination, of ~~tumor~~prednisone, ~~relapse~~doxorubicin, cyclophosphamide, etoposide (referred to as “PACE”). ~~These~~Induction ~~residual~~therapy ~~tumor~~represents ~~cells~~the ~~cannot~~“first-line” ~~always~~treatment befor ~~detected~~FL patients and attempts to induce complete tumor remission as defined by radiological evidence (“CT scans”). In FL, patients treated with the current standard ~~imaging~~of ~~techniques~~ care often achieve complete remission but ~~their~~these ~~destruction~~remissions ~~may~~almost always are of limited duration and most treated patients must eventually be ~~feasible~~re-treated byfor ~~active~~their ~~immunotherapy~~disease. ~~The~~In ~~use~~the majority of ~~such~~cases, ~~vaccines~~however, ~~differs~~even ~~from~~with ~~traditional~~re-treatment, ~~cancer~~the ~~treatment~~disease inoften ~~that~~relapses ~~the~~and ~~ultimate~~develops ~~mechanism~~resistance ofto ~~action~~therapy, ~~against~~leading to a need for bone marrow transplant and eventually resulting in the ~~tumor~~death isof ~~indirect:~~the patient. In the ~~anti-tumor~~Phase ~~immunity~~3 ~~induced~~clinical bytrial, patients who achieved complete response following induction therapy were assigned to a limited waiting period prior to vaccination~~, rather~~ ~~than~~to allow for immune reconstitution following the ~~vaccine~~induction ~~itself,~~chemotherapy. isPatients ~~ultimately~~who ~~responsible~~relapsed ~~for~~during ~~treatment~~this ~~benefit~~immune reconstitution period did not receive either BiovaxID or control treatment. Patients who maintained their complete remission following this immune recovery period received either BiovaxID or control administered as 5 subcutaneous injections monthly over a six month period (one month was skipped).

In 1994, the NCI filed for initiation of an IND for the purpose of conducting clinical trial(s) investigating the use of BiovaxID in NHL. Under this IND and also in 1994, the NCI began the Phase 2 clinical trial in FL; in 1999, the Phase 3 clinical trial in FL; and in 2000 a Phase 2 clinical trial in MCL. The NCI selected us to produce BiovaxID for the initial Phase 2 clinical trial in FL. In 2001, we entered into a formal cooperative research and development agreement (“CRADA”) with the NCI which formalized our collaboration with the NCI. In April 2004, the IND filed by the NCI was formally transferred to us, which made our Company the exclusive sponsor of the IND with full rights to complete the NCI-initiated Phase 3 clinical trial in FL and the NCI-initiated Phase 2 clinical trial in MCL, to communicate and negotiate with the FDA relating to marketing approval for BiovaxID and to conduct other clinical studies in NHL under the IND. 10

~~BiovaxID™~~The ~~Clinical~~primary ~~Trials~~ objective of the Phase 3 clinical trial was to definitively confirm the safety and efficacy of FNHLId1 (autologous immunoglobulin follicular lymphoma idiotype vaccine [Dasiprotimut-T Biovest]) assessed by significant prolongation of clinical DFS following Dasiprotimut-T Biovest immunization with GM-CSF in FL patients achieving a CR with standard dose chemotherapy, when compared to DFS following administration of KLH-KLH and GM-CSF.

~~Phase~~The ~~2 Clinical~~secondary ~~Trial~~objectives of ~~BiovaxID™~~the ~~for~~Phase ~~Treatment~~3 ofclinical FLtrial included:

~~In 1994, the Phase 2 clinical trial~~ (~~NCT00878488~~1) ~~was~~to ~~commenced~~determine by the ~~NCI to evaluate the~~ ability of BiovaxID to ~~eradicate~~produce ~~residual~~a ~~lymphoma~~molecular ~~cells~~CR in ~~20 patients~~subjects ~~with FL who were~~ in ~~chemotherapy-induced first~~ clinical ~~complete remission (“~~CR~~”).~~, ~~All~~but ~~11 patients~~ with ~~a detectable lymphoma gene sequence (translocation) in their primary tumors had cells from the malignant clone detectable in their blood by DNA polymerase chain reaction (“~~PCR”) ~~analysis~~evidence both at diagnosis and after chemotherapy, despite being in CR. In this clinical trial, molecular remission was defined as patients lacking any detectable residual cancer cells bearing the translocation as determined by a very sensitive PCR technique. After vaccination, 8 of these 11 patients converted to lacking cells in their blood from the malignant lymphoma clone detectable by PCR. Anti-tumor T-cell responses were found in the vast majority of the patients (19 of 20 patients), whereas anti-tumor antibodies were detected, but apparently were not required for molecular remission. Vaccination was thus associated with clearance of residual ~~tumor cells from the blood and long-term~~ disease~~-free~~ ~~survival.~~after ~~The~~standard demonstration of molecular remissions besides uniform, specific T-cell responses against lymphoma tumor targets, as well as the addition of granulocyte-monocyte colony-stimulating factor (“GM-CSF”) to the vaccine formulation provided the rationale for the initiation of a larger Phase 3 clinical trial at the NCI in 2000. These results were published in Nature Medicine (October 1999). After a median of 9.17 years, 45% of these patients were still in continuous first CR, the median disease free survival (“DFS”) for the cohort is 96.5 months, and OS is 95% (Santos et al., ASH 2005). chemotherapy;

6(2) to determine the impact of BiovaxID on molecular remission in FL patients;

~~Table~~(3) to evaluate the ability of ~~Contents~~BiovaxID to generate an immune response against autologous tumor;

~~Phase~~(4) 2to ~~Clinical~~determine ~~Trial~~and compare the OS of ~~BiovaxID™~~subjects ~~for~~randomized ~~Treatment~~to ofreceive ~~MCL~~either treatment assignment; and

~~In 2000, the NCI initiated a Phase 2 open-label clinical trial~~ (~~NCT00020215~~5) ~~of BiovaxID for the treatment of MCL. This Phase 2 clinical trial was based upon the NCI’s Phase 2 clinical trial in FL. The primary objective of this Phase 2 clinical trial was~~ to ~~study~~evaluate ~~BiovaxID in treatment-naïve patients with MCL and to determine~~ the safety ~~and efficacy~~ of BiovaxID ~~following~~administered ~~a rituximab-based immunotherapy. Twenty-six patients~~ with untreated, mostly (92%) stage IV MCL, were enrolled. All patients received 6 cycles of EPOCH-R (which is a chemo-immunotherapy consisting of etoposide, prednisone, vincristine, cyclophosphamide, doxorubicin, rituximab); 92% of the patients achieved CR and 8% achieved partial response (“PR”). All but 3 patients (i.e., due to disease progression or inability to manufacture the vaccine) received BiovaxID together with keyhole limpet hemocyanin (“KLH”), an immunogenic carrier protein, on day 1, along with GM-CSF ~~(100 µg/m2/day) on days 1-4 at 1, 2, 3, 4, and 6 months starting at least 3 months post-chemotherapy~~.

~~The results of our MCL Phase 2 clinical trial were reported in Nature Medicine (August 2005). As reported in Nature Medicine~~Biopsy, ~~after a median follow-up of 46 months~~Chemotherapy, ~~the OS was 89%, the median event-free survival (“EFS”) was 22 months,~~ and ~~5 patients~~Immune ~~remained in continuous first CR~~Recovery. ~~Antibody~~Prior ~~responses~~ to ~~immunization were detected in 30% of the patients~~chemotherapy, ~~following~~ a ~~delayed~~small ~~pattern~~tumor ~~(i.e.,~~biopsy ~~detected~~was ~~mostly~~performed ~~after~~to ~~the~~obtain ~~4-5th~~tissue ~~vaccination)~~for ~~which~~tumor ~~paralleled~~classification ~~the peripheral blood B-cell recovery. Most importantly, specific CD4+~~ and ~~CD8+ T-cell responses were detected in 87% of patients post-vaccine~~characterization, and into ~~7 of~~provide 9starting ~~patients~~material ~~tested~~necessary ~~these~~to ~~responses~~manufacture ~~were detected after the 3rd vaccination when peripheral B-cells were by and large undetectable~~BiovaxID. ~~The~~Following ~~detected cytokine release response included GM-CSF, INF-g, and TNF-a (type I). In~~ this ~~study,~~biopsy ~~BiovaxID~~patients ~~induced both~~were ~~humoral~~initially ~~and~~treated ~~cellular~~with ~~immune~~PACE ~~responses following almost complete depletion of B-cells following rituximab-containing~~ chemotherapy. ~~The adverse events observed~~ in ~~this~~order ~~clinical trial were minimal and were limited mostly~~ to ~~injection~~induce ~~site reactions.~~a ~~The~~CR ~~results~~or ofa ~~the~~complete ~~latest~~response ~~follow-up~~unconfirmed ~~of these patients performed in 2011 were presented at the 2011 annual meeting of~~ (~~ASH~~“CRu”) ~~(Grant~~as etmeasured ~~al.,~~by ~~ASH~~CT ~~2011 Abstract #2707)~~scans.

~~With~~The ~~122~~clinical ~~months~~trial ofprotocol ~~median~~stipulated ~~follow-up,~~that ~~the median OS was 104 months. In this study, the Mantle Cell Lymphoma International Prognostic Index (“MIPI”) was associated with OS (P= 0.01), where median OS estimates were not reached~~ for ~~the~~all ~~low risk MIPI group~~patients, 84an ~~months~~immune ~~for~~recovery ~~the~~period ~~intermediate~~of ~~risk~~approximately ~~MIPI~~6 ~~group, and 44~~ months ~~for~~following ~~the~~completion ~~high risk MIPI group. This long term follow-up data presented at the 2011 annual meeting~~ of ~~the~~chemotherapy ~~ASH~~was ~~and~~required ~~at the~~to ~~2012~~be ~~annual~~completed ~~meeting~~without ofrelapse ~~the American Society of Clinical Oncology~~ (“~~ASCO”)~~Immune ~~provided~~Recovery ~~clinical data suggesting that the mechanism of action of BiovaxID is T-cell mediated and not B-cell (humoral~~Period”) ~~mediated. There~~before ~~was a significant association between the production of specific anti-tumor T-cell (GM-CSF cytokine induction) immune response following~~ vaccination ~~and OS and time to next treatment (TTNT)~~. The ~~NCI~~Immune ~~investigators~~Recovery ~~reported~~Period atwas ~~ASH~~required ~~that~~ in ~~patients~~order ~~with~~to ~~normalized GM-CSF~~maximize ~~cytokine production levels above~~ the ~~median~~potential ~~value~~ for ~~the~~immune ~~cohort~~response ~~(>4.3pg/mL), median OS was not reached as compared~~ to 79vaccine ~~months in patients with GM-CSF cytokine levels below the median value (<4.3pg/mL) (P= 0.015 unadjusted; P= 0.045 Bonferroni adjusted) (Fig. 2). There was no association between OS~~ and ~~specific~~to ~~anti-Id~~avoid ~~B-cell~~confounding ~~(humoral)~~factors ~~responses~~from or any ~~other~~potential ~~type~~lingering ofimmunosuppressive ~~specific~~effects ~~cellular responses. Similarly, patients with normalized GM-CSF cytokine production levels above the median value for the cohort (>4.3pg/mL) had a median TTNT~~ of 51chemotherapy.~~9 months as compared to 5.5 months in patients with GM-CSF cytokine levels below the median value (<4.3pg/mL) (P= 0.003) (Fig 3).~~

7Randomization to Immune Recovery Followed by BiovaxID or Control. When the NCI designed the Phase 3 clinical trial in FL protocol, a decision was made to randomize patients, immediately after completion of chemotherapy and not to wait for the completion of the Immune Recovery Period in an effort to avoid expending NCI resources to manufacture patient-specific vaccines for patients who were not anticipated to receive the vaccine (e.g., control patients). In the Phase 3 clinical trial, of the 234 patients initially enrolled into the clinical trial, 177 patients completed chemotherapy, achieved CR/ CRu, and were randomized.

~~Table~~As per the design of ~~Contents~~the Phase 3 clinical trial, patients who relapsed during the Immune Recovery Period were excluded from treatment with BiovaxID or control notwithstanding the fact that they had been randomized. In the Phase 3 clinical trial, of the 177 initially randomized patients, 117 remained eligible to be treated with either BiovaxID (76 patients) or control (41 patients) at the end of the Immune Recovery Period. Sixty patients of the 177 randomized patients and were not treated with either BiovaxID or control mostly due to relapse during the immune recovery period (see Figure 4).

~~Figure 2. Overall Survival by GM-CSF Cytokine Response (< and > than median)~~ 11

Figure 34. ~~Time~~Enrollment, torandomization, ~~next~~and treatment, byTwo GMhundred thirty-~~CSF~~four ~~Cytokine~~patients ~~Response~~were (<enrolled, and >177 ~~than~~patients ~~median)~~were randomized to receive at least one dose of the blinded vaccine; 76 patients received Id-vaccine and 41 received control vaccine.

8Trial Enrollment and the Use of Rituximab-Containing Induction Chemotherapy. During the course of the Phase 3 clinical trial, the standard of care for induction chemotherapy in FL changed to include rituximab, which reduced the ability to recruit and enroll patients into the study. In order to facilitate enrollment in the clinical trial, we amended the study protocol in 2007 to permit the use of a rituximab-containing chemotherapy regimen (“CHOP-R”), as induction therapy. However, the FDA requested that we abstain from vaccinating any patients who received CHOP-R and we did not vaccinate any of the patients who received CHOP-R chemotherapy under the Phase 3 clinical trial protocol.

~~Table of Contents~~12

Due to the protracted enrollment, the Phase 3 ~~Clinical~~clinical ~~Trial~~trial’s ofIndependent ~~BiovaxID™~~Data Monitoring Committee (“DMC”; a committee responsible for ~~Treatment~~reviewing the available unblinded clinical trial data in the study and responsible for recommendations to the sponsor and the FDA) recommended an interim analysis of FLthe clinical trial’s endpoints and overall safety profile which resulted in the termination and halting of the trial in 2008.

~~Overview~~As ~~and~~of ~~Objectives.~~April 15, ~~In January 2000~~2008, when the Phase 3 clinical trial inwas FLofficially ~~(NCT00091676)~~closed, a total of 234 subjects had been enrolled and 177 subjects had been randomized. The total number of subject was ~~initiated~~less bythan the ~~NCI~~original planned sample size which called for 629 subjects to be enrolled and 540 to be randomized. ~~The~~While the termination of the Phase 3 clinical trial ~~was~~before completion of the planned accrual resulted in a ~~multi-center,~~ ~~double-blind~~smaller sample size than was originally intended, we believe that the randomized, ~~controlled~~nature of our Phase 3 clinical trial ~~that~~yields ~~was~~a ~~designed~~valid toconclusion ~~confirm~~because the ~~results~~baseline ~~reported~~characteristics inof the ~~NCI’s~~patients ~~Phase~~in the 2 ~~clinical~~groups ~~trial.~~were balanced, the allocation to treatment arms was concealed, and the study was double-blinded.

AsResults ~~studied in the Phase 3 clinical trial, BiovaxID consisted~~ of the patient-specific idiotype protein (Id) derived from the patient’s cancer cells conjugated or combined with KLH and administered with GM-CSF which is a biological response enhancer. The comparator studied in the Phase 3 ~~clinical~~Clinical ~~trial was a control vaccine consisting of KLH and administered with GM-CSF~~Trial. Accordingly, the only difference between BiovaxID and the control vaccine was the inclusion of the idiotype protein from the patient’s own tumor in BiovaxID. BiovaxID or the control vaccine was administered following chemotherapy (also referred to as induction therapy) with a drug combination, of prednisone, doxorubicin, cyclophosphamide, etoposide (referred to as “PACE”). Induction therapy represents the “first-line” treatment for FL patients and attempts to induce complete tumor remission as defined by radiological evidence (“CT scans”). In FL, patients treated with the current standard of care often achieve complete remission but these remissions almost always are of limited duration and most treated patients must eventually be re-treated for their disease. In the majority of cases, however, even with re-treatment, the disease often relapses and develops resistance to therapy, leading to a need for bone marrow transplant and eventually resulting in the death of the patient. In the Phase 3 clinical trial, patients who achieved complete response following induction therapy were assigned to a limited waiting period prior to vaccination to allow for immune reconstitution following the induction chemotherapy. Patients who relapsed during this immune reconstitution period did not receive either BiovaxID or control treatment. Patients who maintained their complete remission following this immune recovery period received either BiovaxID or control administered as 5 subcutaneous injections monthly over a six month period (one month was skipped).

~~The~~Of ~~primary~~the ~~objectives~~177 ofrandomized patients in the ~~Phase~~ITT 3(intent ~~clinical~~to ~~trial~~treat) population, 60 were censored due to ~~confirm~~ineligibility post-randomization due to the ~~safety~~ following: pre-vaccine relapse (n = 51, 28.8%), vaccine manufacturing hold (n = 6, 3.4%), and ~~efficacy~~1 ofeach ~~BiovaxID~~(0.6%) for lost to follow-up, withdrawal prior to vaccination, and transformation to diffuse large B-cell lymphoma. Importantly, relapse events that disqualified 51 patients for post-randomization treatment occurred in a blinded manner and were independent of external factors and were a consequence of each patient’s disease. Post-randomization relapse was equivalent between the two ~~predefined~~treatment groups: 29.7% versus 27.1%, active (BiovaxID+GM-CSF) to control (KLH-KLH+GM-CSF), respectively. Due to vaccine manufacturing failure, 5 patients who were randomized to receive active treatment (i.e., BiovaxID+GM-CSF) actually received control treatment (i.e., KLH-KLH+GM-CSF), as per the prospective protocol provisions. In the ITT population there were statistically significant differences in demographics and baseline characteristics between the treatment arms.

At a median follow-up of 56.6 months (1range: 4.2 – 92.0 months), ~~All~~median ~~Randomized~~DFS ~~Patients~~in (the ~~“Randomized~~ITT ~~Patients”~~population was 46.0 months for patients in the active treatment group (BiovaxID+GM-CSF): ~~The~~versus ~~Randomized~~30.6 ~~Patients~~months ~~including~~for patients ~~who~~in ~~completed~~the ~~initial~~control ~~chemotherapy~~treatment ~~but~~group ~~relapsed~~(KLH-KLH+GM-CSF) (log rank P = 0.029, controlled for FLIPI risk group and ~~did~~number ~~not~~of ~~receive~~chemotherapy ~~either~~cycles). BiovaxID orvaccination therefore resulted in a 42% decrease in risk of relapse compared to control vaccination (HR= 0.58; ~~and~~%95CI: 0.370- 0.960).

~~(2)~~Median ~~All~~OS ~~Treated~~was ~~Patients:~~not ~~the~~reached ~~Randomized~~in ~~Patients~~either ~~who were disease-free at the time of vaccination and consequently received at least 1 dose of BiovaxID or control~~arm.

~~The~~Figure ~~secondary~~5. ~~objectives~~Disease-free ofsurvival ~~the~~(DFS) ~~Phase~~according 3to ~~clinical~~treatment ~~trial~~arm ~~included:~~for ITT Population (N = 177).

~~(1) to determine the ability of BiovaxID to produce a molecular CR in subjects in clinical CR, but with PCR evidence of residual disease after standard chemotherapy;~~13

Analysis of Patients by Isotype. A typical antibody (2“immunoglobulin”), toincluding ~~determine~~the lymphoma immunoglobulin expressed on the ~~impact~~surface of ~~BiovaxID~~each cancerous lymphoma cell, is composed of protein “heavy chains” and “light chains”. In humans, the heavy chains are classified as IgG, IgM, IgA, IgD and IgE, and the light chains are classified as either kappa or lambda. The Id protein expressed on ~~molecular~~the ~~remission~~surface of FL cells is characteristic of the single B-cell from which the tumor arose. The immunoglobulin protein contains a region known as the “heavy chain” and a region known as the “light chain” (see Figure 7). Almost always in FL, the heavy chain region is characterized as either an IgM-isotype or an IgG-isotype. Figure 7 illustrates the dramatic differences in the structure of immunoglobulin protein characterized as an IgM-isotype as opposed that characterized as an IgG-isotype. Accordingly, an antibody may be referred to as IgG-isotype or IgM-isotype depending on its heavy-chain classification. In the normal immune response, antibody isotypes may have different roles and may help direct the appropriate immune response. The small region at the tip of the antibody is known as the “variable region”, or antibody binding site, and the balance of the isotype is known as the “constant region”. When we manufacture BiovaxID, we screen each patient’s tumor cells obtained by biopsy for the isotype. Approximately, 60% of patients with FL are diagnosed with tumors expressing an IgM isotype and approximately 40% of patients bear tumors expressing an IgG isotype. In rare cases (<1%), patients are diagnosed with another isotype (e.g. IgA). Infrequently, the patient’s tumor also contains cells with one or more isotype (a heterogenous or “mixed” isotype); in these patients we select either an IgG or IgM isotype for manufacture of BiovaxID. Each patient’s tumor isotype can be readily determined by standard analytical techniques (flow cytometry) at the time of the patient’s tumor biopsy. In both the Phase 2 and Phase 3 clinical trials in FL patients, the determination of tumor heavy-chain isotype determined the specific manufacturing and purification process used to make that patient’s vaccine. For patients who have tumors expressing an IgG (or an IgG-containing “mixed” isotype), we manufacture an IgG isotype vaccine and for patients determined to have tumors expressing an IgM (or an IgM-containing “mixed” isotype), we manufacture an IgM vaccine. Due to our manufacturing process (rescue fusion hybridoma), the isotype (IgG or IgM) of the tumor is entirely reproduced in each patient’s vaccine so that each patient’s BiovaxID vaccine matches the patient’s original tumor isotype (IgG or IgM).

~~(3)~~Figure to7. ~~evaluate~~The Id protein expressed on the ~~ability~~surface of ~~BiovaxID~~FL tocells ~~generate~~is an ~~immune~~immunoglobulin ~~response~~protein ~~against~~characteristic ~~autologous~~of the single B-cell from which the tumor; arose.

~~(4) to determine and compare the OS of subjects randomized to receive either treatment assignment; and~~14

Preclinical data indicates that the ability to develop an immune response differs between IgM-isotype and IgG-isotype idiotypes (5De Grootx, 2008; Reitan, 1995; Reitan, 2002); however, we do not currently have immune response data from human clinical trials to ~~evaluate~~confirm this preclinical data. The IgG-isotype idiotype was reported to be tolerogenic, meaning that the ~~safety~~immune response against the specific tumor target is suppressed. On the other hand, the IgM-isotype idiotype was reported to be highly immunogenic, meaning that it induces an ample, persistent immune response against the specific tumor target. A feature of ~~BiovaxID~~our ~~administered~~Phase ~~with~~3 GMclinical trial was the manufacturing and administration of tumor-~~CSF~~matched isotype idiotype vaccines which, allowed us to investigate whether these preclinical data translate into differential clinical efficacy of the two isotype vaccines in our clinical trial.

~~Biopsy,~~In ~~Chemotherapy~~an unplanned subgroup analyses, ~~and~~DFS ~~Immune~~was ~~Recovery~~analyzed by tumor Ig heavy chain isotypes (IgM and IgG). ~~Prior~~Five topatients ~~chemotherapy,~~from athe ~~small~~ITT ~~tumor~~population ~~biopsy~~were excluded from these analyses because their tumors isotype was ~~performed~~mixed toIgM/ ~~obtain~~or ~~tissue~~IgD. ~~for~~The ~~tumor~~IgM ~~classification~~subgroup included 94 patients (N= 61 active, N= 33 control), and ~~characterization~~the IgG subgroup included 78 patients (N= 55 active, N= 23 control). In both isotype subgroups there were no statistically significant differences in baseline patient characteristics between experimental and tocontrol ~~provide~~arms. ~~starting~~Among ~~material necessary~~patients receiving an IgM-Id vaccine, median time to ~~manufacture~~relapse ~~BiovaxID~~after randomization was 52.9 ~~Following~~months ~~this~~versus ~~biopsy~~28.7 ~~patients~~months ~~were~~in ~~initially~~IgM tumor isotype control-treated ~~with~~patients ~~PACE~~(P= ~~chemotherapy~~0.004; inHR= ~~order~~0.33; 95% CI: 0.157- 0.727). Among patients receiving IgG-Id vaccine, median time to ~~induce~~relapse aafter CRrandomization orwas a36.2 ~~complete~~months ~~response~~versus ~~unconfirmed~~32.4 months in IgG tumor isotype control-treated patients (~~“CRu”~~P= 0.703; HR= 1.19; 95% CI: 0.472- 3.036). Cox proportional hazard modeling including the main effects of treatment arm and tumor isotype,, adjusted for FLIPI risk group and the number of chemotherapy cycles received, supports a differential effect of treatment by isotype as ~~measured~~indicated by CTthe ~~scans.~~P value of the interaction term between treatment and tumor Ig isotype (P= 0.062).

~~The~~In ~~clinical~~an ~~trial~~unplanned ~~protocol~~analysis, ~~stipulated~~we ~~that~~compared ~~for~~DFS ~~all~~of Id-vaccinated patients, anwith ~~immune~~control ~~recovery~~patients ~~period~~by oftumor ~~approximately~~Ig 6isotype ~~months~~and ~~following~~its ~~completion~~analysis ~~of chemotherapy~~ was ~~required~~highly consistent with the manufacturing process, which requires isotype identification prior to beinitiation ~~completed~~of ~~without~~vaccine ~~relapse~~manufacture ~~(“Immune~~due ~~Recovery~~to ~~Period”)~~the ~~before~~need ~~vaccination~~for isotype specific vaccine purification. ~~The~~To ~~Immune~~address ~~Recovery~~whether ~~Period~~there was ~~required~~a indifferential ~~order~~treatment toeffect ~~maximize~~on ~~the~~DFS ~~potential~~depending ~~for~~on ~~immune~~Ig ~~response~~isotype, towe ~~vaccine~~used Cox proportional hazards modeling where the interaction term between treatment and toIg isotype ~~avoid~~was ~~confounding~~estimated ~~factors~~adjusting ~~from~~for ~~any potential~~main ~~lingering~~effect ~~immunosuppressive~~and ~~effects~~for International PrognosticIndex and number of chemotherapy. cycles as covariates.

We also analyzed DFS of vaccinated patients by tumor Ig heavy and light chain isotypes. For IgM and IgG heavy chain isotype groups, there were no statistically significant differences in baseline patient characteristics between experimental and control arms (IgM isotype, N= 35 vs N= 25; IgG-isotype, N= 40 vs. N= 15 for Id-vaccine and control arms, respectively). In patients presenting with an IgM tumor isotype and receiving an IgM-Id vaccine, median time to relapse after randomization was 52.9 months versus 28.7 months in IgM tumor isotype control-treated patients (P= 0.001) and 30.6 months in all controls (Figure 8). Among patients receiving IgG-Id vaccine, median time to relapse after randomization was 35.1 months versus 32.4 months in IgG tumor isotype control-treated patients (P= 0.807) (Figure 9). Cox proportional hazard modeling supports an interaction between treatment arm and Ig isotype (P=0.039). When patients were grouped by light chain type, there was no difference in DFS (data not shown).

~~Table~~Figure of8. Disease ~~Contents~~free survival in IgM isotype patients

Randomization to Immune Recovery Followed by BiovaxID or Control. When the NCI designed the Phase 3 clinical trial in FL protocol, a decision was made to randomize patients, immediately after completion of chemotherapy and not to wait for the completion of the Immune Recovery Period in an effort to avoid expending NCI resources to manufacture patient-specific vaccines for patients who were not anticipated to receive the vaccine (e.g., control patients). In the Phase 3 clinical trial, of the 234 patients initially enrolled into the clinical trial, 177 patients completed chemotherapy successfully and were randomized. 15

AsFigure per the design of the Phase 3 clinical trial, patients who relapsed during the Immune Recovery Period were excluded from treatment with BiovaxID or control notwithstanding the fact that they had been randomized9. Disease Infree ~~the~~survival ~~Phase~~in 3IgG ~~clinical~~isotype ~~trial, of the 177 initially randomized~~ patients, 117 remained eligible to be treated with either BiovaxID (76 patients) or control (41 patients) at the end of the Immune Recovery Period. Sixty patients of the 177 randomized patients relapsed during the Immune Recovery Period and were not treated with either BiovaxID or control (see Figure 4).

~~Figure~~Our 4.Phase ~~Enrolment,~~3 ~~randomization,~~clinical ~~and~~trial ~~treatment~~had two unique manufacturing features, ~~Two~~where: ~~hundred~~(a) the ~~thirty-four~~vaccine ~~patients~~consists ~~were~~of ~~enrolled~~the full structure of the idiotype protein (that is, both the variable and ~~177~~ ~~patients~~the ~~were~~constant ~~randomized~~regions of the immunoglobulin) and (b) the idiotype of the vaccine matches the idiotype of the patient’s own tumor. These unique features allowed us to ~~receive~~be atthe ~~least~~first ~~one~~to ~~dose~~investigate the clinical efficacy implications of the ~~blinded~~two ~~vaccine;~~tumor 76isotypes. ~~patients~~The ~~received~~prior ~~Id-vaccine~~Phase ~~and~~3 41clinical ~~received~~trials ~~control~~of ~~vaccine~~FL idiotype vaccines conducted by Genitope Corporation (“Genitope”) and Favrille, Inc. ~~Patients~~(“Favrille”) ~~receiving~~used ~~fewer~~a ~~than~~manufacturing 5process ~~blinded~~known ~~immunizations~~as ~~either~~recombinant ~~withdrew~~manufacturing ~~from~~that universally linked the ~~study~~patient’s variable region of ~~relapsed before~~the ~~completion~~idiotype into an IgG isotype without regard to the actual isotype of each patient’s tumor. ~~Left:~~We ~~The~~believe ~~primary~~that ~~prospectively~~the use of an IgG isotype was due to the comparative ease of manufacture and purification of IgG proteins as well as to their relatively long half-~~defined~~life. ~~cohorts~~There ~~for~~are ~~survival~~two ~~analysis~~implications ~~(ITT:~~of ~~all~~the ~~randomized~~manufacturing ~~patients~~processes ~~including~~used ~~patients~~by ~~who~~these ~~did~~prior ~~not~~clinical ~~receive~~trials: ~~active~~(1) clinical orefficacy ~~control~~cannot ~~treatment~~be compared by isotype group; and ~~mITT:~~(2) the ~~randomized~~lack ~~patients~~of ~~excluding~~clinical ~~patients~~efficacy ~~who~~observed ~~did~~in ~~not receive~~these ~~active~~clinical ortrials ~~control~~may ~~treatment)~~be due to the tolerogenic effect of the universal IgG isotype used in the vaccine manufacturing. As such, we believe that our analysis by tumor isotype may provide profound insight into the efficacy of BiovaxID and may also suggest methods by which cancer vaccines in general could be developed in the future.

Trial Enrollment and the Use of Rituximab-Containing Induction Chemotherapy. During the course of the Phase 3 clinical trial, the standard of care for induction chemotherapy in FL changed to include rituximab, which reduced the ability to recruit and enroll patients into the study. In order to facilitate enrollment in the clinical trial, we amended the study protocol in 2007 to permit the use of a rituximab-containing chemotherapy regimen (“CHOP-R”), as induction therapy. However, the FDA requested that we abstain from vaccinating any patients who received CHOP-R and we did not vaccinate any of the patients who received CHOP-R chemotherapy under the Phase 3 clinical trial protocol. 16

10BiovaxID Regulatory and Marketing Status

~~Table~~Under our IND for BiovaxID, two Phase 2 clinical trials and one Phase 3 clinical trial have been completed studying BiovaxID for the indications of ~~Contents~~FL and MCL. We believe that these clinical trials demonstrate the safety and efficacy of BiovaxID and we have presented comprehensive summaries of the clinical development and clinical data to regulatory authorities in the EU, Canada and the U.S.

~~Due~~Based on our scientific advice meetings with multiple EU-Member national medicines agencies, on June 13, 2012, we filed our formal notice of intent to file a MAA with the ~~protracted~~EMA, ~~enrollment~~which began the EU marketing approval application process. In response to our notice of intent to file for marketing approval, the ~~Phase~~EMA 3notified ~~clinical~~us ~~trial~~that we were eligible to submit our planned MAA for BiovaxID under the EMA’s ~~Independent~~centralized ~~Data~~procedure, ~~Monitoring~~as an orphan medicinal product for the treatment of FL. Under the EMA centralized procedure, the marketing approval of BiovaxID can be simultaneously obtained throughout all EU-member countries with a single MAA. Also, as part of the EMA’s centralized procedure, our MAA for BiovaxID will be assessed by the EMA’s Committee for Medicinal Products for Human Use (“~~DMC~~CHMP”;), which designates from within its membership, a ~~committee~~Rapporteur ~~responsible~~and ~~for~~Co-Rapporteur, ~~reviewing~~as well as a Pharmacovigilance Risk Assessment Committee (“PRAC”) Rapporteur and Co-Rapporteur. The Rapporteur and Co-Rapporteur are assigned with the ~~available~~primary ~~unblinded~~responsibility ~~clinical~~of ~~trial~~preparing ~~data~~and indelivering an approvability evaluation report, supported by a team of assessors from their National Authority. In 2012, the ~~study~~PRAC Rapporteur and ~~responsible~~Co-Rapporteur ~~for~~was ~~recommendations~~implemented, after the latest revisions to the ~~sponsor~~EMA safety requirements on Pharmacovigilance and Risk Assessment Plan, with the ~~FDA)~~primary ~~recommended~~responsibility of preparing and delivering an ~~interim~~approvability ~~analysis~~evaluation ofreport ~~the~~specifically ~~clinical~~with ~~trial~~regards to safety. The EMA has also notified us regarding the EMA’s ~~endpoints and~~official ~~overall~~designation ~~safety~~of ~~profile~~the ~~which~~Rapporteur ~~resulted~~and inCo-Rapporteur, ~~the~~and ~~termination~~PRAC Rapporteur and ~~halting~~Co-Rapporteur ofto our planned MAA for BiovaxID. We conducted our EMA Pre-submission Meeting for the ~~trial~~MAA inon ~~2008~~September 12, 2012, during which our planned application dossier was validated. Subsequently, on December 3, 2013, we submitted an MAA with the EMA for BiovaxID.

~~As of April 15~~Additionally, ~~2008,~~based ~~when~~on ~~the Phase 3 clinical trial was officially closed,~~ a ~~total~~scientific ofadvice ~~234~~meeting ~~subjects~~conducted ~~had~~with ~~been~~Health enrolled and 177 subjects had been randomized. The total number of subject was less than the original planned sample size which called for 629 subjects to be enrolled and 540 to be randomized. While the termination of the Phase 3 clinical trial before completion of the planned accrual resulted in a smaller sample size than was originally intendedCanada, we ~~believe~~have ~~that~~announced ~~the~~plans ~~randomized~~to ~~nature~~file ~~of our Phase 3 clinical trial yields~~ a ~~valid~~NDS ~~conclusion~~seeking ~~because~~regulatory ~~the~~approval ~~baseline characteristics of the patients~~ in ~~the 2 groups were balanced, the allocation to treatment arms was concealed, and the study was double-blinded~~Canada.

~~Results~~We ofconducted ~~Phase~~a 3formal ~~Clinical~~guidance ~~Trial.~~meeting Aswith ~~reported~~the atFDA in order to discuss the ~~plenary~~path ~~session~~for our filing of ~~the~~a ~~2009~~BLA ~~annual~~for ~~meeting~~BiovaxID’s U.S. regulatory/marketing approval. As a result of ~~ASCO~~this guidance meeting, ~~the~~we ~~patient~~plan ~~cohort~~to ofconduct a second Phase 3 clinical trial to complete the ~~177~~clinical ~~randomized patients~~data ~~(which~~gained ~~included~~through ~~117~~our ~~(66%) treated~~first ~~patients~~Phase 3 clinical trial and ~~60 (35%)~~our ~~patients~~BiovaxID ~~who~~development ~~were~~program ~~not~~to ~~treated)~~support ~~did~~our ~~not~~filing ~~demonstrate~~of ~~statistically~~our ~~significant~~BLA ~~difference~~for inBiovaxID. We ~~median~~are ~~DFS~~preparing ~~from~~to ~~randomization~~initiate ~~between~~this ~~treatment~~second ~~and~~Phase ~~control~~3 ~~arms.~~clinical trial subject to required funding.

~~Figure~~As 5.we ~~Disease-free~~continue ~~survival~~to ~~(DFS)~~advance ~~according~~our efforts to ~~study~~comply ~~group~~with ~~for~~various ~~All~~regulatory ~~Randomized~~validations ~~Patients~~and (Ncomparability =requirements ~~177). Kaplan-Meier~~related ~~actuarial~~to ~~curves~~our ~~for~~manufacturing ~~DFS~~process ~~for~~and ~~the~~facility, ~~Randomized~~no ~~Patients~~assurances ~~are~~can ~~shown~~be ~~according~~given tothat ~~their~~substantial ~~study~~additional ~~group~~requirements ofwill ~~Id-KLH+GM-CSF~~not (Nbe =imposed ~~118)~~by orany ~~KLH+GM-CSF~~regulatory (Nagencies, =including ~~59).~~the ~~The~~EMA, ~~number~~Health ~~of events~~Canada, ~~median,~~ and ~~95%~~the ~~confidence~~FDA ~~intervals~~ for ~~each~~the ~~group~~regulatory/marketing ~~are~~approval ~~also presented.~~of BiovaxID.

11Subsequent regulatory/marketing approval of BiovaxID, if any, may require us to perform additional clinical studies as a condition to approval or continued marketing of BiovaxID, which may result in additional clinical trial expenses. Once received, there can be no assurances that we will receive continued regulatory/marketing approval. Our ability to timely access required financing will continue to be essential to support the ongoing efforts to pursue the development and potential regulatory/marketing approval and commercialization efforts of BiovaxID.

~~Table of Contents~~17

AtProprietary ~~the~~Rights 2009 annual meeting of ASCO, we further reported the median DFS data for the patients who received at least one vaccination either with BiovaxID or control. In this cohort of 117 patients they represent a modified intent-to~~-treat~~ ~~population, median DFS was 13.6 months longer in patients who received~~ BiovaxID compared to patients who received control. This analysis reflects the prospectively defined primary clinical trial objective. Accordingly, there were 60 patients who were randomized but who did not receive either BiovaxID or control and who are not included in this analysis. Of these 117 treated patients, 76 patients received at least one dose of BiovaxID (the “BiovaxID Arm”) and 41 patients received at least one dose of control (the “Control Arm”). No serious adverse events were reported in either the BiovaxID Arm or the Control Arm. At the median follow-up of 56.6 months (range 12.6-89.3 months), a statistically significant improvement of 13.6 months was observed in DFS between patients in the BiovaxID Arm (44.2 months), versus the Control Arm (30.6 months) (log-rank p-value = 0.045; HR = 1.6). Using a Cox proportional-hazard model, a statistically significant hazard ratio (HR) of 0.62 was achieved (p=0.048; 95% CI: 0.39, 0.99). This means that patients receiving BiovaxID experienced an approximately 61% (1/0.62) lower risk of cancer recurrence compared to patients who received the control vaccine. The Phase 3 clinical trial’s secondary endpoint of OS has not yet been reached for either group due to the length of follow-up to date.

~~Figure~~As 6.a ~~Disease-free~~result ~~survival~~of ~~(DFS)~~the ~~according~~FDA’s toOrphan ~~study~~Drug ~~group~~designation of BiovaxID for the ~~Randomized~~treatment ~~Patients~~of ~~who received~~FL, ~~blinded~~MCL ~~vaccinations~~and (NWaldenstrom's =Macroglobulinemia, ~~117).~~a ~~Kaplan~~rare B-~~Meier~~cell ~~actuarial~~subtype ~~curves~~of ~~for~~NHL, ~~DFS~~we ~~for~~have ~~the~~7 ~~Randomized~~years ~~Patients~~of ~~who~~market ~~received~~exclusivity atin ~~least~~the ~~one~~U.S. ~~dose~~from the date of the ~~Id-KLH+GM-CSF~~FDA’s (Nmarketing =approval ~~76)~~for orthese ~~KLH+GM~~three B-~~CSF~~cell (Nsubtypes =of ~~41)~~NHL. ~~are~~We ~~shown.~~also ~~The~~have ~~number~~10 years of ~~events,~~market ~~median,~~exclusivity ~~and~~in ~~95% confidence~~the ~~intervals~~EU as a result of EMA’s Orphan Medicinal Product designation of BiovaxID for ~~each~~the ~~group~~treatment ~~are~~of ~~also~~FL ~~presented.~~and MCL.

In addition, the regulations adopted in both the U.S. and the EU governing “biosimilar” products (the term adopted to describe generic biologic pharmaceutical products) provide us with “data exclusivity” (i.e., no biosimilar could reference the BiovaxID clinical data) for 12 years in the U.S. and 8 years in the EU. Those same biosimilar regulations make it extremely difficult to qualify as a “biosimilar”, and even for those products which can clear that hurdle independent clinical data is required prior to licensure.

~~Table~~In addition to market exclusivity based on governmental regulation, we rely on proprietary rights provided by a combination of ~~Contents~~an exclusive world-wide license to the cell line that is used in the production of BiovaxID, patent protection, trade secret protection, and our ongoing innovation. Although the composition of BiovaxID, in its current form, is not patentable, we have filed U.S. and foreign patent applications relating to methods of treatment using BiovaxID. We have also filed an international patent application (“PCT”) and a provisional application relating to methods for producing and selecting idiotype vaccines for treatment of B-cell cancers. Also, we have filed a provisional application covering the use of a biomarker for predicting cancer vaccine effectiveness and patient outcomes. In addition, we have filed U.S. and foreign patent applications relating to certain features of the AutovaxID® instrument used in the production of BiovaxID. The AutovaxID instrument is our proprietary production system which is fully enclosed, automated and has disposable components for each patient’s personalized vaccine. We believe that, without the availability of an automated production system, the methods used to produce a patient-specific immunotherapy are time-consuming and labor-intensive, resulting in a very expensive process that would be difficult to scale up. Following the findings related to the apparent role of the IgM isotype in clinical benefit from the vaccine, we filed a broad range of patent applications covering various applications of these findings. We have re-filed for U.S. registration of the trademark BiovaxID and have registered BiovaxID® as a Community Trademark in the EU. BiovaxID is manufactured with a proprietary cell line, which we have licensed on a worldwide exclusive basis from Stanford University (“Stanford”). We believe that the use of any cell line other than our exclusively licensed cell line, in the production of a similar idiotype vaccine would require filing a separate IND application and undergoing clinical testing evaluation by the FDA.

Analysis of Patients by Isotype. A typical antibody (“immunoglobulin”), including the lymphoma immunoglobulin expressed on the surface of each cancerous lymphoma cell, is composed of protein “heavy chains” and “light chains”. In humans, the heavy chains are classified as IgG, IgM, IgA, IgD and IgE, and the light chains are classified as either kappa or lambda. The Id protein expressed on the surface of FL cells is characteristic of the single B-cell from which the tumor arose. The immunoglobulin protein contains a region known as the “heavy chain” and a region known as the “light chain” (see Figure 7). Almost always in FL, the heavy chain region is characterized as either an IgM-isotype or an IgG-isotype. Figure 7 illustrates the dramatic differences in the structure of immunoglobulin protein characterized as an IgM-isotype as opposed that characterized as an IgG-isotype. Accordingly, an antibody may be referred to as IgG-isotype or IgM-isotype depending on its heavy-chain classification. In the normal immune response, antibody isotypes may have different roles and may help direct the appropriate immune response. The small region at the tip of the antibody is known as the “variable region”, or antibody binding site, and the balance of the isotype is known as the “constant region”. When we manufacture BiovaxID, weManufacturing ~~screen~~Process ~~each patient’s tumor cells obtained by biopsy for the isotype. Approximately, 60% of patients with FL are diagnosed with tumors expressing an IgM isotype~~ and approximately 40% of patients bear tumors expressing an IgG isotype. In rare cases (<1%), patients are diagnosed with another isotype (e.g. IgA). Infrequently, the patient’s tumor also contains cells with one or more isotype (a heterogenous or “mixed” isotype); in these patients we select either an IgG or IgM isotype for manufacture of BiovaxID. Each patient’s tumor isotype can be readily determined by standard analytical techniques (flow cytometry) at the time of the patient’s tumor biopsy. In both the Phase 2 and Phase 3 clinical trials in FL patients, the determination of tumor heavy-chain isotype determined the specific manufacturing and purification process used to make that patient’s vaccine. For patients who have tumors expressing an IgG (or an IgG-containing “mixed” isotype), we manufacture an IgG isotype vaccine and for patients determined to have tumors expressing an IgM (or an IgM-containing “mixed” isotype), we manufacture an IgM vaccine. Due to our manufacturing process (rescue fusion hybridoma), the isotype (IgG or IgM) of the tumor is entirely reproduced in each patient’s vaccine so that each patient’s BiovaxID vaccine matches the patient’s original tumor isotype (IgG or IgM). Facility

~~Figure~~Manufacturing ~~7. The Id protein expressed on the surface of FL cells is an immunoglobulin protein characteristic of the single B-cell from which the tumor arose.~~ Process

13The BiovaxID manufacturing production process begins when a sample of the patient’s tumor is extracted by a biopsy and the sample is shipped refrigerated to our facility in Minneapolis (Coon Rapids), Minnesota. At our facility, we identify the idiotype that is expressed on the surface of the patient’s tumor cells through laboratory analysis. Additionally, we identify whether the isotype is IgM or IgG. In NHL, the tumor B-cells bear the surface idiotype (immunoglobulin or antibody) derived from the original transformed malignant B-cell, but do not typically secrete it in an amount suitable for vaccine production. In order to make sufficient quantities of idiotype for vaccination, the patient’s tumor cells are then fused with an exclusively licensed cell line (mouse/human heterohybridoma cell line, K6H6) from Stanford to create a hybridoma or hybrid cell.

~~Table~~After the creation of ~~Contents~~the hybridoma, we determine which hybridoma cells display the same antigen idiotype as the patient’s tumor cells, and those cells are selected to produce the vaccine. The selected hybridoma cells are then seeded into our proprietary hollow fiber bioreactors, where they are cultured and where they secrete or produce idiotype antigen. The secreted idiotype is then collected from the cells growing in the hollow fiber bioreactor. After a sufficient amount of idiotype is collected for the production of an appropriate amount of the vaccine, the patient’s idiotype is purified using multi-step purification processes (see Figure 10a).

Preclinical data indicates that the ability to develop an immune response differs between IgM-isotype and IgG-isotype idiotypes; however, we do not currently have immune response data from human clinical trials to confirm this preclinical data. The IgG-isotype idiotype was reported to be tolerogenic, meaning that the immune response against the specific tumor target is suppressed. On the other hand, the IgM-isotype idiotype was reported to be highly immunogenic, meaning that it induces an ample, persistent immune response against the specific tumor target. The unique feature of our Phase 3 clinical trial was the manufacturing and administration of tumor-matched isotype idiotype vaccines which, allowed us to investigate whether these preclinical data translate into differential clinical efficacy of the two isotype vaccines in our clinical trial. 18

InFigure 10a. Individualized Manufacturing Process for BiovaxID Immunotherapy: (Clockwise) Beginning with an ~~unplanned~~excisional ~~analysis~~(>2cm) lymph node biopsy, wetumor ~~compared~~cells ~~DFS~~are fused with our proprietary mouse/human heterohybridoma in order to induce secretion of Idnormally surface-~~vaccinated~~bound ~~patients~~tumor ~~with~~immunoglobulin ~~control~~(idiotype). ~~patients~~Id-secreting clones are identified by comparing their unique idiotype sequence to the tumor’s Igafter ~~isotype~~which isthey ~~analysis~~are ~~was~~cultured ~~highly consistent~~(expanded) ~~with~~in ~~the~~a ~~manufacturing~~proprietary ~~process~~hollow fiber bioreactor system (not shown). During culture, ~~which~~supernatant ~~requires~~(containing ~~isotype~~idiotype) ~~identification~~is ~~prior~~collected tountil ~~initiation~~sufficient ofamounts ~~vaccine~~have ~~manufacture~~been ~~due~~produced to ~~the~~yield ~~need~~adequate ~~for~~dosage ~~isotype~~of ~~specific~~ vaccine ~~purification~~. ToThis ~~address~~supernatant ~~whether~~is ~~there~~purified ~~was~~by aaffinity ~~differential~~chromatography ~~treatment~~and ~~effect~~conjugated ~~on DFS~~(bonded) ~~depending~~to onKLH Igcarrier ~~isotype~~protein, weresulting ~~used~~in ~~Cox~~a ~~proportional~~finished ~~hazards~~vaccine ~~modeling~~that ~~where~~can ~~the~~be ~~interaction~~shipped ~~term~~and ~~between~~administered ~~treatment~~to ~~and~~patients. IgIn ~~isotype~~our ~~was~~Phase ~~estimated~~3 ~~adjusting~~clinical ~~for~~trial, ~~main~~manufacturing ~~effect~~success ~~and~~was ~~for~~approximately ~~International~~95% ~~PrognosticIndex~~of ~~and~~treated ~~number~~patients. of(Fig. ~~chemotherapy~~reprinted ~~cycles~~from ~~as covariates~~Neelapu, et al. Exp. Opin Biol Ther 2007).

We also analyzed DFS of vaccinated patients by tumor Ig heavy and light chain isotypes. For IgM and IgG heavy chain isotype groups, there were no statistically significant differences in baseline patient characteristics between experimental and control arms (IgM isotype, N= 35 vs N= 25; IgG-isotype, N= 40 vs. N= 15 for Id-vaccine and control arms, respectively). In patients presenting with an IgM tumor isotype and receiving an IgM-Id vaccine, median time to relapse after randomization was 52.9 months versus 28.7 months in IgM tumor isotype control-treated patients (P= 0.001) and 30.6 months in all controls (Figure 8)10b. ~~Among~~Hollow ~~patients~~fiber ~~receiving~~perfusion ~~IgG-Id vaccine, median time~~ to ~~relapse~~produce ~~after~~the ~~randomization~~cell ~~was~~cultures ~~35.1~~used ~~months versus 32.4 months~~ in ~~IgG~~the ~~tumor~~manufacture ~~isotype~~of ~~control-treated patients (P= 0~~BiovaxID.807) (Figure 9). Cox proportional hazard modeling supports an interaction between treatment arm and Ig isotype (P=0.039). When patients were grouped by light chain type, there was no difference in DFS (data not shown).

~~Figure 8. Disease free survival in IgM isotype patients~~ 19

14We use a method known as “hollow fiber perfusion” to produce the cell cultures used in the manufacture of BiovaxID (see Figure 10b). Hollow fiber perfusion, as compared to other cell culture methods, seeks to grow cells to higher densities more closely approaching the density of cells naturally occurring in body tissue. The hollow fiber perfusion method involves using hair-like plastic fibers with hollow centers which are intended to simulate human capillaries. Thousands of these fibers are inserted in a cartridge, which we refer to as a bioreactor. The cells are grown on the outside of the hollow fibers while nutrient media used to support cell growth is delivered through the hollow centers of the fibers. The fiber walls have small pores, allowing nutrients to pass from the hollow center to the cells. The fibers act as filters and yield concentrated secreted products. Because the cells are immobilized in the bioreactor, the concentrated product can be harvested during the ongoing cell growth process. We believe that hollow fiber technology permits the harvest of cell culture products with generally higher purities than stirred-tank fermentation, a common alternative cell culture method, thereby reducing the cost of purification as compared to stirred tank fermentation. Additionally, the technology associated with the hollow fiber process generally minimizes the amount of costly nutrient media required for cell growth as opposed to other cell culturing techniques.

~~Table~~After manufacture and purification, the resulting purified idiotype is then conjugated, or joined together, with KLH, to create the vaccine. KLH is a foreign carrier protein that is used to improve the immunogenicity, or ability to evoke an immune response, of ~~Contents~~the tumor-specific idiotype. The BiovaxID vaccine is then frozen and shipped to the treating physician. At the treating physician’s office, the vaccine is thawed and injected into the patient.

~~Figure~~BiovaxID 9is administered in conjunction with GM-CSF, a natural immune system growth factor that is administered with the idiotype vaccine to stimulate the immune system and increase the response to the idiotype vaccine. ~~Disease~~In ~~free~~the ~~survival~~Phase in2 ~~IgG~~and ~~isotype~~Phase 3 clinical trials FL patients were administered 5 monthly BiovaxID injections in the amount of 0.5 milligram of idiotype per injection, with the injections being given over a 6-month period of time in which the fifth month is skipped. Through this process, the patient-specific idiotype is used to stimulate the patient’s immune system into targeting and destroying malignant B-cells bearing the same idiotype.

~~Our~~We ~~Phase~~estimate 3that ~~clinical~~an ~~trial~~average ~~had~~of ~~two~~2 ~~unique~~to ~~manufacturing~~3 ~~features,~~months ~~where:~~is ~~(a) the~~required ~~vaccine~~to ~~consists~~manufacture ofeach ~~the~~vaccine, ~~full~~which ~~structure~~for ofmost ~~the~~patients ~~idiotype~~may ~~protein (that~~overlap ~~is, both~~ the ~~variable~~time ~~and~~period ~~the~~when ~~constant~~induction ~~regions~~chemotherapy ofis ~~the~~being ~~immunoglobulin)~~administered. ~~and~~While ~~(b)~~ the ~~idiotype~~manufacturing ofprocess ~~the~~for ~~vaccine~~BiovaxID ~~matches~~is ~~the~~highly ~~idiotype~~personalized ofto ~~the~~each patient’s, ~~own~~we ~~tumor.~~consider ~~These~~it ~~unique features allowed us~~ to be ~~the~~highly ~~first~~controlled toand ~~investigate the clinical efficacy implications of the two tumor isotypes~~predictable. The ~~prior~~most ~~Phase~~common 3reason ~~clinical~~for ~~trials of FL idiotype vaccines conducted by Genitope Corporation (“Genitope”) and Favrille, Inc. (“Favrille”) used~~ a ~~manufacturing~~failure ~~process known as recombinant manufacturing that universally linked the patient’s variable region of the idiotype into an IgG isotype without regard~~ to ~~the~~successfully ~~actual~~produce ~~isotype~~a ~~of each~~ patient’s ~~tumor.~~vaccine Wewas ~~believe that~~ the ~~use~~presence of anrare ~~IgG~~idiotype ~~isotype~~variants ~~was~~as ~~due~~opposed to the ~~comparative~~ ~~ease~~failure of ~~manufacture~~a ~~and~~step ~~purification~~in ~~of IgG proteins as well as to their relatively long half-life. There are two implications of~~ the manufacturing ~~processes~~process. ~~used~~During ~~by these prior clinical trials: (1) clinical efficacy cannot be compared by isotype group; and (2)~~ the ~~lack~~Phase of3 clinical ~~efficacy~~trial, ~~observed~~we inexperienced ~~these~~approximately ~~clinical~~95% ~~trials~~success ~~may~~rate ~~be due to the tolerogenic effect of the universal IgG isotype used~~ in ~~the vaccine~~ manufacturing. ~~As such, we believe that~~ our ~~analysis by tumor isotype may provide profound insight into the efficacy of~~ BiovaxID ~~and may also suggest methods by which cancer~~ vaccines ~~in general could be developed in the future~~.

15Manufacturing Facility

~~Table~~BiovaxID is a personalized medicine which is produced separately for each individual patient through a laboratory-type process based on the patient’s own tumor cells derived by biopsy. Following regulatory/marketing approval of ~~Contents~~BiovaxID, we plan to initially produce BiovaxID in our existing leasehold space in Minneapolis (Coon Rapids), Minnesota. In order to facilitate the regulatory/marketing approval process, we have completed a dedicated pilot scale suite of laboratory clean rooms especially designed to produce BiovaxID. As the regulatory/marketing approval process advances toward completion and subject to availability of funding, we anticipate expanding our current leasehold space or adding new manufacturing facilities as required to, meet the anticipated commercialization requirements. During our Phase 3 clinical trial, BiovaxID was produced at our facility in Worcester, Massachusetts. Because, we have relocated the site of the manufacturing process to our Minneapolis (Coon Rapids), Minnesota facility following the Phase 3 clinical trials and because we are expanding this facility, we are currently in the process of demonstrating to the national and/or international regulatory agencies that the BiovaxID vaccine produced under these new conditions is comparable to the BiovaxID vaccine that was the produced subject of earlier clinical testing. This requirement will also apply to future expansions of the facility, such as the possible expansion to additional facilities that may be required for successful commercialization of BiovaxID. There is also a requirement for validation of the manufacturing process for BiovaxID utilizing our AutovaxID® instrument. A showing of comparability requires data demonstrating that the BiovaxID vaccine produced continues to be safe, pure, and potent and may be based on chemical, physical, and biological assays and, in some cases, other non-clinical data.

~~BiovaxID™ Regulatory and Marketing Status~~ 20

~~Under~~INSTRUMENTS ~~our~~AND IND for BiovaxID, two Phase 2 clinical trials and one Phase 3 clinical trial have been completed studying BiovaxID for the indications of FL and MCL. BiovaxID has demonstrated statistically significant Phase 3 clinical benefit by prolonging disease-free survival in FL patients treated with BiovaxID compared to vaccinated controls. We believe that these clinical trials demonstrate the safety and efficacy of BiovaxID and we have presented comprehensive summaries of the clinical development and clinical data to regulatory authorities in the EU, Canada and the U.S. DISPOSABLES

~~Based~~We onprovide ~~our scientific advice meetings with multiple EU-Member national medicines agencies, on June 13, 2012, we filed our formal notice of intent to file~~ a ~~MAA~~range ~~with the EMA, which begins the EU marketing approval application process. In response to our notice~~ of ~~intent~~cell toculture ~~file~~systems ~~for marketing approval, the EMA notified us~~ that we are ~~eligible~~used to ~~submit~~produce ~~our~~small, ~~planned~~research ~~MAA~~and ~~for~~development-scale ~~BiovaxID~~through ~~under~~large, ~~the~~production-scale ~~EMA’s~~quantities ~~centralized~~of ~~procedure,~~cell asculture anproducts. ~~orphan medicinal~~Our ~~product~~cell ~~for~~culture ~~the~~systems ~~treatment~~all ofincorporate ~~FL.~~perfusion ~~Under~~technology ~~the~~and ~~EMA~~hollow ~~centralized~~fiber ~~procedure,~~cartridges. ~~the~~This ~~marketing~~segment ~~approval~~ of ~~BiovaxID~~our ~~can~~business berepresented ~~simultaneously~~approximately ~~obtained~~$1.6 ~~throughout~~million ~~all~~(approximately ~~EU-member~~39%) ~~countries~~and ~~with a single MAA~~$0.8 ~~Also,~~million as(approximately ~~part~~22%) of ~~the EMA’s centralized procedure,~~ our ~~planned~~total ~~MAA~~revenues for ~~BiovaxID will be assessed by~~ the ~~EMA’s~~years ~~Committee~~ended ~~for~~September ~~Medicinal Products for Human Use (“CHMP”)~~30, ~~which~~2013 ~~designates from within its membership, a Rapporteur~~ and ~~Co-Rapporteur~~2012, ~~as well as a Pharmacovigilance Risk Assessment Committee (“PRAC”) Rapporteur and Co-Rapporteur~~respectively. Because ~~The~~of ~~Rapporteur~~these ~~and~~shared ~~Co-Rapporteur~~characteristics, ~~are~~all ~~assigned~~of ~~with~~our ~~the~~cell ~~primary~~culture ~~responsibility~~systems oflisted ~~preparing~~below ~~and~~can ~~delivering~~be anused ~~approvability~~to ~~evaluation~~culture ~~report, supported by~~ a ~~team~~variety of ~~assessors from~~cell ~~their~~lines ~~National Authority. In 2012~~(hybridomas, ~~the PRAC Rapporteur and Co-Rapporteur was implemented~~CHO, ~~after the latest revisions to the EMA safety requirements on Pharmacovigilance and Risk Assessment Plan~~MDCK, ~~with~~BHK ~~the primary responsibility of preparing~~ and ~~delivering~~ anothers) ~~approvability evaluation report specifically with regards~~ to ~~safety.~~produce ~~The~~a ~~EMA~~range ~~has also notified us regarding the EMA’s official designation~~ of ~~the Rapporteur and Co~~cell-~~Rapporteur~~based products, ~~and~~such ~~PRAC~~as ~~Rapporteur~~monoclonal ~~and~~antibodies, ~~Co-Rapporteur~~other tosecreted ~~our~~proteins, ~~planned MAA~~virus, ~~for BiovaxID. We conducted our EMA Pre~~virus-~~submission~~like ~~Meeting for the MAA on September 12~~particles, ~~2012~~vaccines, ~~during~~and ~~which~~whole ~~our planned application dossier was validated~~cells. WeOur ~~could~~smaller ~~receive~~cell aculture ~~decision~~systems ~~regarding~~can EUbe ~~marketing~~scaled-up ~~approval~~to ~~for~~any ~~BiovaxID within 12 months after the submission~~ of our ~~MAA,~~larger ~~assuming~~cell ~~that~~culture ~~the~~systems. Our ~~rigorous~~cell ~~review~~culture ~~process~~system ~~advances~~product ~~forward~~line, in aorder ~~timely~~of ~~and~~increasing ~~positive~~capacity, ~~manner and no substantial regulatory issues or problems are encountered.~~ includes:

~~Additionally,~~HF ~~based~~PRIMER™: onThe HF Primer is a ~~scientific~~low-cost ~~advice~~cell ~~meeting~~culture ~~conducted~~system ~~with~~capable ~~Health~~of ~~Canada~~producing small, weresearch ~~have~~and ~~announced~~development ~~plans~~quantities toof ~~file~~the acell ~~NDS~~culture ~~seeking~~products ~~regulatory~~from ~~approval~~mammalian ~~in Canada~~cell lines. WeThe ~~could~~HF ~~receive~~Primer aalso ~~decision~~provides ~~regarding~~a ~~Canadian~~relatively ~~regulatory~~inexpensive ~~approval~~option ~~for~~to ~~BiovaxID~~evaluate ~~within~~the 12efficacy ~~months~~of ~~after~~new ~~the~~cell ~~submission~~lines ofor ~~our~~applications ~~NDS,~~in ~~assuming~~perfusion technology that ~~the~~can ~~rigorous~~then ~~review~~be ~~process~~scaled-up ~~advances~~to ~~forward~~any inof aour ~~timely~~larger ~~and~~cell ~~positive~~culture ~~manner~~systems. ~~and~~HF noPrimer ~~substantial regulatory~~is ~~issues~~a orsingle-use, ~~problems~~fully ~~are~~disposable ~~encountered.~~product that requires no investment in custom equipment.

WeMULTI-6™: ~~conducted~~The Multi-6 is a ~~formal~~low-cost ~~guidance~~cell ~~meeting~~culture ~~with~~system ~~the~~capable ~~FDA~~of insimultaneously ~~order~~producing tosmall, ~~define~~research ~~the~~and ~~path~~development ~~for~~-scale ~~our~~quantities ~~filing~~ of asix ~~BLA~~different ~~for~~cell ~~BiovaxID’s~~culture Uproducts.S. ~~regulatory/marketing approval. Further~~Optionally, ~~in its guidance,~~ the ~~FDA~~Multi-6 ~~required~~can ~~that~~be weused ~~conduct a second Phase 3 clinical trial~~ to ~~complete~~produce ~~the~~one ~~clinical~~cell ~~data~~culture ~~gained~~product ~~through~~at ~~our~~a ~~first~~rate ~~Phase~~that 3is ~~clinical~~six-fold ~~trial~~higher ~~and~~than ~~our BiovaxID development program to support our filing of~~ the ~~BLA~~HF ~~for BiovaxID~~Primer. WeThis ~~are~~flexibility ~~preparing,~~allows ~~subject~~a toresearcher ~~required funding,~~ to ~~initiate~~operate ~~this~~one ~~second~~Multi-6 ~~Phase~~instead 3of ~~clinical~~managing ~~trial~~six toseparate ~~advance~~HF ~~BiovaxID~~Primer ~~toward~~systems ~~the~~running Uside-by-side.S. ~~market.~~Multi-6 ~~Concurrent~~applications ~~with~~can ~~complying~~be ~~with~~scaled-up ~~the FDA’s guidance, we plan~~ to ~~continue~~our tolarger ~~advance~~AutovaxID® ~~marketing~~or ~~and~~other ~~regulatory~~cell ~~approvals~~culture ~~for~~systems ~~BiovaxID~~listed inbelow, if the EUneed ~~and~~arises. ~~Canada~~Multi-6 ~~with~~is ~~those planned filings of~~ a ~~MAA and NDS~~single-use, ~~respectively,~~fully ~~supported~~disposable byproduct ~~evidence~~that ofrequires ~~clinical~~no ~~benefit~~investment ~~from the three clinical trials conducted to date~~ in ~~collaboration~~custom ~~with the NCI~~equipment.

AsAUTOVAXID®: weThe ~~continue~~AutovaxID is our most advanced, fully automated cell culture system. Its setup and operation requires very little technician expertise and labor in comparison to ~~advance~~competing cell culture system technologies and even our ~~efforts~~other cell culture systems listed below. The AutovaxID was designed from the beginning to: ~~comply~~enable ~~with~~multi-product ~~various~~facilities, ~~regulatory~~capture ~~validations~~ most all production information into its CFR 21 Part 11-compliant electronic records system, and ~~comparability~~operate ~~requirements~~as ~~related~~a tofully ~~our~~closed-system biologics-manufacturing ~~process~~platform. The AutovaxID allows supervisors to implement built-in software controls to ensure technicians adhere to strictly defined production protocols for cGMP environments or remove this feature when it is not needed, such as in research and ~~facility~~development operations. There are four single-use AutovaxID disposables to provide researchers the needed flexibility to go from research and development- through pilot-scale production. One of the disposable options even allows the simultaneous culturing of three different cell lines to produce three different products in small quantities. When needed, noone ~~assurances~~cell line can then be ~~given~~scaled-up ~~that~~to ~~substantial~~AutovaxID’s ~~additional~~larger-capacity ~~requirements~~disposables. ~~will~~We ~~not~~plan beto ~~imposed~~utilize byAutovaxID’s ~~any~~advanced ~~regulatory~~capabilities ~~agencies,~~to ~~including~~streamline commercial manufacture of BiovaxID. AutovaxID is the ~~EMA,~~first ~~Health~~cell ~~Canada,~~culture system that enables production of personalized cell-based treatments economically and in compliance with cGMP standards. Additionally, we have contracted with the ~~FDA~~DoD ~~for~~ and others to further develop the ~~regulatory/marketing~~AutovaxID ~~approval~~and related hollow fiber bioreactor systems to explore potential production of ~~BiovaxID.~~additional vaccines, including vaccines for viral indications such as influenza and other contagious diseases.

~~Subsequent~~ACUSYST-MINIMAX®: ~~regulatory/marketing~~The ~~approval~~miniMAX ofis ~~BiovaxID,~~an ifeconomical ~~any,~~system ~~may~~that ~~require~~provides usthe flexibility and technology needed to ~~perform additional~~support ~~clinical~~optimization studies asand aresearch- ~~condition~~through topilot-scale ~~approval~~production orof ~~continued~~the ~~marketing~~cell ofculture ~~BiovaxID,~~products ~~which~~listed ~~may~~above. ~~result~~The inminiMax ~~additional~~is ~~clinical~~a ~~trial~~tabletop ~~expenses.~~instrument ~~Once~~that ~~received~~uses simple, ~~there~~but ~~can~~robust, bemicroprocessors noto ~~assurances~~automatically ~~that~~control wepH, ~~will~~incubator ~~receive~~temperature, ~~continued~~fluid-flow ~~regulatory/marketing approval~~dynamics, and seven process pumps. ~~Our~~ ~~ability~~This system offers two single-use disposables options to ~~timely~~meet ~~access~~varying ~~required~~production ~~financing~~requirements. ~~will~~Optimization ~~continue~~results todetermined in the miniMAX can be ~~essential~~transferred to ~~support~~our ~~the~~larger ~~ongoing~~systems ~~efforts~~listed below. The production capacity is equivalent to ~~pursue~~an AutovaxID, but the ~~development~~miniMAX ~~and~~does ~~potential~~not ~~regulatory/marketing~~have ~~approval~~the ~~and~~advanced ~~commercialization~~features, ~~efforts~~controls, simpler setup and ease of ~~BiovaxID.~~operation available through the AutovaxID.

16ACUSYST-MAXIMIZER®: The Maximizer is an economical system with a design that is similar to the miniMAX system. This system has all of the features of miniMAX, using single-use disposables that either match or double the production capacity of the miniMAX system. The Maximizer is an economical system for process development and routine productions. The Maximizer offers the flexibility of four single-use disposables to meet varying production requirements. Production processes determined in the Maximizer can be scaled-up to our largest cell culture system, AcuSyst-Xcellerator®.

~~Table~~ACUSYST-XCELLERATOR®: The Xcellerator is a freestanding, production-scale cell culture system that has been used for production of ~~Contents~~a FDA-licensed biologic. The Xcellerator contains an incubator, a refrigerator, a built-in computer that has a CFR 21 Part 11-compliant electronic records system, numerous process pumps, and a touch screen for local control. The Xcellerator supports remote monitoring and/or control via standard web browsers. The system supports two independent single-use disposables and, therefore, can simultaneously culture two different cell lines to produce two products. The Xcellerator has a production capacity that is equivalent to a 20x scale-up of AutovaxID’s capacity.

~~Proprietary Rights to BiovaxID™~~ 21

AsIn aaddition ~~result~~to ofinstrument ~~the FDA’s Orphan Drug designation of BiovaxID for the treatment of FL, MCL~~ and ~~Waldenstrom’s~~disposables ~~Macroglobulinemia~~sales, ~~a rare B-cell subtype of NHL,~~ we have 7recurring ~~years~~revenue ~~of market exclusivity in the U.S.~~ from the ~~date~~sale of ~~the~~hollow ~~FDA’s~~fiber ~~marketing~~bioreactors, ~~approval~~cultureware, ~~for~~tubing ~~these~~sets ~~three~~and ~~B-cell~~other ~~subtypes~~disposable ofproducts ~~NHL.~~and Wesupplies ~~also~~for ~~have~~use 10with ~~years~~our ofcell ~~market~~culture ~~exclusivity~~system ininstrument ~~the~~product ~~EU as a result of EMA’s Orphan Medicinal Product designation of BiovaxID for the treatment of FL and MCL~~line.

~~In addition~~Currently, ~~the~~we ~~regulations~~assemble, ~~adopted~~validate inand ~~both~~package the ~~U.S.~~instruments and ~~the~~disposables, EUcell ~~governing~~culture ~~“biosimilar”~~ products ~~(the~~and ~~term~~services ~~adopted to~~which ~~describe~~we ~~generic biologic pharmaceutical products) provide us with “data exclusivity” (i~~sell.~~e.,~~ noCustomers ~~biosimilar could reference the BiovaxID clinical data)~~ for ~~12 years~~our ininstruments ~~the U.S.~~ and 8disposables ~~years~~are in the ~~EU. Those~~ same ~~biosimilar regulations~~potential ~~make~~customers ittargeted ~~extremely~~for ~~difficult~~our tocontract ~~qualify~~cell asculture aproducts ~~“biosimilar”,~~ and ~~even~~services ~~for~~which ~~those~~include ~~products~~biopharmaceutical ~~which~~and ~~can~~biotechnology ~~clear~~companies, ~~that~~medical ~~hurdle~~schools, ~~independent~~universities, ~~clinical~~research ~~data~~facilities, ishospitals ~~required~~and ~~prior~~public toand ~~licensure.~~private laboratories.

InProprietary ~~addition~~Rights to ~~market~~Instruments exclusivity based on governmental regulation, we rely on proprietary rights provided by a combination of an exclusive world-wide license to the cell line that is used in the production of BiovaxID, patent protection, trade secret protection, and our ongoing innovation. Although the composition of BiovaxID, in its current form, is not patentable, we have filed U.S. and foreign patent applications relating to methods of treatment using BiovaxID. We have also filed an international patent application (“PCT”) and a provisional application relating to methods for producing and selecting idiotype vaccines for treatment of B-cell cancers. Also, we have filed a provisional application covering the use of a biomarker for predicting cancer vaccine effectiveness and patient outcomes. In addition, we have filed U.S. and foreign patent applications relating to certain features of the AutovaxID® instrument used in the production of BiovaxID. The AutovaxID instrument is our proprietary production system which is fully enclosed, automated and has disposable components for each patient’s personalized vaccine. We believe that, without the availability of an automated production system, the methods used to produce a patient-specific immunotherapy are time-consuming and labor-intensive, resulting in a very expensive process that would be difficult to scale up. Following the findings related to the apparent role of the IgM isotype in clinical benefit from the vaccine, we filed a broad range of patent applications covering various applications of these findings. We have re-filed for U.S. registration of the trademark BiovaxID™ and have registered BiovaxID® as a Community Trademark in the EU. BiovaxID™ is manufactured with a proprietary cell line, which we have licensed on a worldwide exclusive basis from Stanford University (“Stanford”). We believe that the use of any cell line other than our exclusively licensed cell line, in the production of a similar idiotype vaccine would require filing a separate IND application and undergoing clinical testing evaluation by the FDA. Disposables

~~BiovaxID~~We own several patents covering various aspects of our hollow fiber perfusion process, instruments and proprietary cell culturing methods. We own U.S. Patent No. 6,001,585, which protects the HF Primer™ ~~Manufacturing Process~~cell culture system and ~~Facility~~its use in screening cell lines and process conditions. Although the HF Primer is impractical for large-scale vaccine production, it may be used as an efficient screening tool to cost-effectively determine how well a cell line will perform in a hollow fiber system, such as the AutovaxID® instrument, which is used in the production of BiovaxID. U.S. Patent No. 6,001,585 will expire in November 2017.

~~Manufacturing~~We ~~Process~~have also filed U.S. and foreign patent applications relating to certain features of the AutovaxID instrument. Several patents have been granted in the EU covering the AutovaxID’s extra-capillary (“EC”) fluid cycling system, which enables control of fluid volumes in the hollow fiber bioreactor during manufacture of BiovaxID in a closed, contamination-free environment. These EU patents will remain in force until 2027.

~~The~~We ~~BiovaxID~~have ~~manufacturing~~filed ~~production process begins when~~ (a) ~~sample of the patient’s tumor is extracted by~~ a ~~biopsy~~PCT ~~and~~application covering the ~~sample~~use isof ~~shipped~~AutovaxID ~~refrigerated~~instrumentation tofor ~~our~~rapid, ~~facility~~large-scale inproduction ~~Minneapolis~~of ~~(Coon Rapids)~~virus, ~~Minnesota.~~ Atvirus-like ~~our facility~~particles, weand ~~identify~~viral ~~the~~vaccines ~~idiotype~~at ~~that~~a ishigh ~~expressed~~yield, on(b) ~~the~~a ~~surface~~PCT ofapplication ~~the~~concerning ~~patient’s~~an ~~tumor~~integrated ~~cells~~apparatus ~~through~~and ~~laboratory~~method ~~analysis.~~for ~~Additionally,~~production weand ~~identify~~purification ~~whether~~of ~~the isotype is IgM or IgG. In NHL~~antibodies, ~~the~~and ~~tumor B-cells bear the surface idiotype~~ (~~immunoglobulin or antibody~~c) ~~derived~~a ~~from~~provisional ~~the~~application ~~original~~concerning ~~transformed~~cultureware ~~malignant~~modules ~~B-cell,~~and ~~but~~biomanufacturing dosuites ~~not typically secrete it in an amount suitable~~ for ~~vaccine~~large-scale production. ~~In order to make sufficient quantities~~ of ~~idiotype for vaccination, the patient’s tumor~~ cells ~~are~~and ~~then fused with an exclusively licensed~~ cell-derived ~~line~~products ~~(mouse/human~~such ~~heterohybridoma~~as ~~cell~~antibodies, ~~line~~proteins, ~~K6H6)~~virus, ~~from~~and ~~Stanford~~virus-like ~~to create a hybridoma or hybrid cell~~particles.

~~After~~CELL ~~the~~CULTURE ~~creation~~PRODUCTS ofAND the hybridoma, we determine which hybridoma cells display the same antigen idiotype as the patient’s tumor cells, and those cells are selected to produce the vaccine. The selected hybridoma cells are then seeded into our proprietary hollow fiber bioreactors, where they are cultured and where they secrete or produce idiotype antigen. The secreted idiotype is then collected from the cells growing in the hollow fiber bioreactor. After a sufficient amount of idiotype is collected for the production of an appropriate amount of the vaccine, the patient’s idiotype is purified using multi-step purification processes (see Figure 10a). SERVICES

17We manufacture mammalian cell culture products such as, whole cells, recombinant and secreted proteins, and monoclonal antibodies. Additionally, we provide related services as a contract resource to assist our customers in developing cell production process protocols, cell line optimization, cell culture production optimization, media evaluation and other related services. This segment of our business represented approximately $1.6 million (approximately 39%) and $0.8 million (approximately 22%) of our total revenues for the years ended September 30, 2013 and 2012, respectively.

~~Table~~With our focus on pre-launch therapeutics and marketed diagnostics production, we serve all the manufacturing needs of ~~Contents~~our customers. From process development to regulatory support, our one-stop comprehensive approach provides solutions for clients that have chosen to temporarily or permanently outsource any or all stages of drug development. If needed, commercial production capacity for product launch is seamless, we provide all the required regulatory support, including biocompatibility studies.

~~Figure~~With ~~10a.~~nearly ~~Individualized~~30 ~~Manufacturing~~years ~~Process~~of ~~for~~expert ~~BiovaxID™~~experience ~~Immunotherapy:~~in ~~(Clockwise) Beginning~~cell ~~with an excisional (>2cm) lymph node biopsy~~culture, ~~tumor~~we ~~cells~~formulate ~~are~~the ~~fused~~optimal ~~with~~strategy for our ~~proprietary~~customers’ ~~mouse/human~~biologics ~~heterohybridoma~~manufacturing. inBy ~~order~~accurately tomatching ~~induce~~the ~~secretion~~level of ~~normally~~hollow ~~surface-bound~~fiber ~~tumor~~bioreactor ~~immunoglobulin~~production ~~(idiotype).~~technology ~~Id-secreting clones are identified by comparing their unique idiotype sequence~~ to ~~the~~our ~~tumor~~customers’s ~~after~~phase ~~which~~of ~~they~~product ~~are~~development, ~~cultured~~our ~~(expanded)~~customers incan amanage ~~proprietary~~their ~~hollow~~overall ~~fiber~~investment ~~bioreactor system (not shown)~~risk. ~~During~~Only ~~culture,~~as ~~supernatant~~products ~~(containing~~advance ~~idiotype)~~to isthe ~~collected~~next ~~until sufficient~~stage ~~amounts~~of ~~have~~development ~~been~~do ~~produced~~we scale to ~~yield~~higher-output ~~adequate~~production ~~dosage~~systems. Customers of ~~vaccine.~~our ~~This~~cell ~~supernatant~~culture isproducts ~~purified~~and byservices ~~affinity~~are ~~chromatography~~biopharmaceutical and ~~conjugated~~biotechnology ~~(bonded)~~companies, tomedical ~~KLH~~schools, ~~carrier protein~~universities, ~~resulting~~research infacilities, ahospitals ~~finished~~and ~~vaccine~~public ~~that~~and ~~can~~private belaboratories. ~~shipped~~We ~~and~~generally ~~administered to~~produce ~~patients.~~cell Inculture ~~our~~products ~~Phase~~pursuant 3to ~~clinical~~contracts ~~trial,~~which ~~manufacturing~~specify ~~success~~the ~~was~~customer’s ~~approximately~~requirements ~~95%~~for ofthe ~~treated~~cell ~~patients.~~culture ~~(Fig.~~products ~~reprinted~~to ~~from~~be ~~Neelapu,~~produced etor ~~al.~~the ~~Exp.~~services ~~Opin~~to ~~Biol~~be ~~Ther 2007)~~performed.

~~Figure 10b. Hollow fiber perfusion to produce the cell cultures used in the manufacture of BiovaxID™.~~ 22

18There are various processes commonly used to expand mammalian cells generally used for the production of antibodies. These may include hollow fiber bioreactor perfusion, stirred tank fermentation, roller bottle and other processes. We primarily use hollow fiber bioreactor technology to expand customer provided cell lines and produce the respective monoclonal antibodies. This technology grows cells to higher densities which more closely mimics mammalian physiology. We have significant expertise with in vitro (outside the living body) cell culture methods for a wide variety of mammalian cells. Mammalian cells are complicated and dynamic, with constantly changing needs. A primary component of hollow fiber bioreactors is fibers made of plastic polymers. The fibers are hair-like with hollow centers which simulate human capillaries. Thousands of these fibers are inserted in a cartridge, which we refer to as a bioreactor. The cells are grown on the outside of the hollow fibers while nutrient media used to support cell growth is perfused through the lumen of the fibers. The fiber walls have small pores, allowing nutrients to pass from the hollow center to the cells. The fibers act as filters and yield concentrated secreted products. Because the cells are immobilized in the bioreactor, the concentrated product can be harvested during the ongoing cell growth process. Hollow fiber technology permits harvests of cell culture products with generally higher purities thereby reducing the cost of downstream purification processes. This technology generally minimizes the amount of costly nutrient media required for cell growth.

~~Table~~The most generally used process for mammalian cell production is stirred tank fermentation. Hollow fiber bioreactor technology can be contrasted with the competitive stirred tank fermentation process which takes place in tanks of ~~Contents~~various sizes. Cells are grown inside the tanks in culture medium which is maintained under controlled conditions and continuously stirred to stimulate growth. At the end of the growing process, as opposed to incrementally during the growth process, cells are separated from the medium and the protein of interest is isolated through a series of complex purification processes. The size of the tanks generally result in stirred tank fermentation facilities requiring significantly more start-up costs, space and infrastructure than comparable production facilities using hollow fiber technology. While stirred tank fermentation and hollow fiber technology are both used for cell production of various quantities, we believe that the stirred tank fermentation process is currently more commonly used for larger scale commercial production requirements. We believe that hollow fiber technology has advantages in scalability, start-up time and cost in the early development of antibody production.

WeOur ~~use~~patented ~~a method known as “~~hollow fiber ~~perfusion”~~technology tois ~~produce~~ the ~~cell~~key ~~cultures~~to ~~used~~optimizing inour ~~the manufacture~~customers’ ofbiologics ~~BiovaxID (see Figure 10b)~~manufacturing. ~~Hollow~~For ~~fiber~~Phase ~~perfusion~~I, asPhase ~~compared~~II toand ~~other~~Phase ~~cell~~III ~~culture~~cGMP ~~methods~~production, ~~seeks~~our ~~to grow cells to higher densities more closely approaching the density of cells naturally occurring in body tissue. The~~ hollow fiber bioreactor perfusion ~~method~~technology ~~involves~~provides ~~using~~economic ~~hair-like~~advantages ~~plastic~~through ~~fibers~~largely ~~with~~automated ~~hollow~~culture ~~centers~~of ~~which~~a ~~are~~relatively ~~intended~~large, todensely ~~simulate~~packed ~~human~~population ~~capillaries. Thousands~~ of ~~these~~cells ~~fibers are inserted~~ in a ~~cartridge,~~small ~~which we refer to as a bioreactor~~space. ~~The~~Additionally, ~~cells~~the ~~are~~low ~~grown on~~molecular ~~the~~weight ~~outside~~cut-off of the ~~hollow~~fiber ~~fibers~~membrane ~~while~~allows ~~nutrient~~more expensive media ~~used~~components to ~~support~~be ~~cell growth is delivered through the hollow centers of the fibers. The fiber walls have small pores~~conserved, ~~allowing~~while ~~nutrients~~less toexpensive ~~pass~~basal ~~from~~media ~~the~~is ~~hollow~~continuously ~~center~~perfused tothrough the ~~cells~~bioreactor. ~~The~~As ~~fibers act~~a ~~as filters and yield concentrated secreted products. Because the cells are immobilized in the bioreactor~~result, ~~the~~this ~~concentrated~~automated ~~product~~approach can be ~~harvested~~more ~~during~~cost-effective ~~the~~than ~~ongoing~~conventional ~~cell~~platforms ~~growth~~generally ~~process.~~used Wefor ~~believe~~maintenance ~~that~~of ~~hollow~~large ~~fiber~~cell ~~technology~~populations. ~~permits~~In the ~~harvest~~ ofexpanding ~~cell~~field ~~culture~~of ~~products~~personalized ~~with~~medicine ~~generally~~where ~~higher~~patient ~~purities~~specific ~~than~~drugs ~~stirred-tank~~and ~~fermentation,~~therapeutics aare ~~common~~frequently ~~alternative cell culture method~~envisioned, ~~thereby~~such ~~reducing the cost of purification~~ as ~~compared to stirred tank fermentation. Additionally~~BiovaxID, ~~the technology~~we ~~associated~~believe ~~with~~that ~~the~~ hollow fiber ~~process~~technology ~~generally~~may ~~minimizes~~be the ~~amount~~appropriate ~~of costly nutrient media required for~~ cell ~~growth~~culture asproduction ~~opposed to other cell culturing techniques~~technology.

~~After~~COMPETITION ~~manufacture~~FOR and purification, the resulting purified idiotype is then conjugated, or joined together, with KLH, to create the vaccine. KLH is a foreign carrier protein that is used to improve the immunogenicity, or ability to evoke an immune response, of the tumor-specific idiotype. The BiovaxID vaccine is then frozen and shipped to the treating physician. At the treating physician’s office, the vaccine is thawed and injected into the patient. BIOVAXID

~~BiovaxID~~Biotechnology has experienced, and is ~~administered~~expected into ~~conjunction~~continue ~~with~~to ~~GM-CSF~~experience, arapid ~~natural~~and ~~immune~~significant ~~system~~change. ~~growth~~The ~~factor~~use ~~that~~of ismonoclonal ~~administered~~antibodies ~~with~~as ~~the~~initial ~~idiotype vaccine~~or toinduction ~~stimulate~~therapy, ~~the~~and ~~immune~~increasingly ~~system~~for ~~and~~maintenance ~~increase~~therapy, ~~the~~has ~~response~~become towell-established ~~the~~and ~~idiotype~~generally ~~vaccine~~accepted. InProducts ~~the~~that ~~Phase~~are 2well-established ~~and~~or ~~Phase~~accepted, 3including ~~clinical~~monoclonal ~~trials~~antibodies FLsuch ~~patients~~as ~~were~~Rituxan®, ~~administered~~may 5constitute ~~monthly~~significant ~~BiovaxID~~barriers ~~injections~~to inmarket ~~the~~penetration ~~amount~~and ofregulatory ~~0.5~~approval ~~milligram~~which ofmay ~~idiotype~~be ~~per injection~~expensive, ~~with~~difficult ~~the~~or ~~injections~~even ~~being~~impossible ~~given~~to ~~over~~overcome. aNew ~~6-month~~developments ~~period~~in ofbiotechnological ~~time~~processes inare ~~which~~expected ~~the~~to ~~fifth~~continue ~~month~~at isa ~~skipped.~~rapid ~~Through~~pace ~~this~~in ~~process~~both industry and academia, ~~the~~and ~~patient-specific~~these ~~idiotype~~developments isare ~~used~~likely to ~~stimulate~~result ~~the~~in ~~patient’s~~commercial ~~immune~~applications ~~system~~competitive ~~into~~with ~~targeting~~BiovaxID. ~~and~~We ~~destroying malignant~~expect ~~B-cells~~to ~~bearing~~encounter ~~the~~intense ~~same~~competition ~~idiotype~~from a number of companies that offer products in our targeted application area. We anticipate that our competitors in these areas will consist of both well-established and development-stage companies and will include:

We• ~~estimate~~healthcare that an average of 2 to 3 months is required to manufacture each vaccine, which for most patients may overlap the time period when induction chemotherapy is being administered. While the manufacturing process for BiovaxID is highly personalized to each patient, we consider it to be highly controlled and predictable. The most common reason for a failure to successfully produce a patient’s vaccine was the presence of rare idiotype variants as opposed to the failure of a step in the manufacturing process. During the Phase 3 clinical trial, we experienced approximately 95% success rate in manufacturing our BiovaxID vaccines. companies;

~~Manufacturing~~• ~~Facility~~chemical and biotechnology companies;

~~BiovaxID™~~• isbiopharmaceutical acompanies; personalized medicine which is produced separately for each individual patient through a laboratory-type process based on the patient’s own tumor cells derived by biopsy. Following regulatory/marketing approval of BiovaxID, we plan to initially produce BiovaxID in our existing leasehold space in Minneapolis (Coon Rapids), Minnesota. In order to facilitate the regulatory/marketing approval process, we have completed a dedicated pilot scale suite of laboratory clean rooms especially designed to produce BiovaxID. As the regulatory/marketing approval process advances toward completion and subject to availability of funding, we anticipate expanding our current leasehold space or adding new manufacturing facilities as required to, meet the anticipated commercialization requirements. During our Phase 3 clinical trial, BiovaxID was produced at our facility in Worcester, Massachusetts. Because, we have relocated the site of the manufacturing process to our Minneapolis (Coon Rapids), Minnesota facility following the Phase 3 clinical trials and because we are expanding this facility, we are currently in the process of demonstrating to the national and/or international regulatory agencies that the BiovaxID vaccine produced under these new conditions is comparable to the BiovaxID vaccine that was the produced subject of earlier clinical testing. This requirement will also apply to future expansions of the facility, such as the possible expansion to additional facilities that may be required for successful commercialization of BiovaxID. There is also a requirement for validation of the manufacturing process for BiovaxID utilizing our AutovaxID® instrument. A showing of comparability requires data demonstrating that the BiovaxID vaccine produced continues to be safe, pure, and potent and may be based on chemical, physical, and biological assays and, in some cases, other non-clinical data.

19• companies developing drug discovery technologies.

~~Table~~We expect to compete on, among other things, the safety and efficacy of ~~Contents~~our product candidates and more desirable treatment regimens, combined with the effectiveness of our experienced management team. Competing successfully will depend on our continued ability to attract and retain skilled and experienced personnel, to identify and secure the rights to and develop pharmaceutical products and compounds and to exploit these pharmaceutical products and compounds commercially before others are able to develop competitive products.

~~INSTRUMENTS AND DISPOSABLES~~ 23

WeIf ~~provide~~approved, aBiovaxID ~~range~~will ofbe ~~cell~~required ~~culture~~to ~~systems~~compete ~~that~~with ~~are~~currently ~~used~~approved ~~to produce small~~therapies, ~~research~~as ~~and~~well ~~development-scale~~as ~~through~~therapies ~~large,~~which ~~production-scale~~may ~~quantities~~be ofapproved ~~cell~~in ~~culture~~the ~~products~~future. ~~Our~~There ~~cell~~are ~~culture~~currently ~~systems~~no ~~all incorporate~~approved ~~perfusion~~active ~~technology~~immunotherapeutic ~~and~~drugs ~~hollow~~which ~~fiber~~seek ~~cartridges.~~to ~~Because~~induce ofan ~~these shared characteristics~~adaptive, ~~all~~specific ofand ~~our~~durable ~~cell~~immune ~~culture~~response ~~systems listed below can be used~~ to ~~culture~~identify aand ~~variety~~eradicate ofthe ~~cell~~residual ~~lines~~lymphoma ~~(hybridomas,~~cells ~~CHO,~~remaining ~~MDCK,~~after ~~BHK and others) to produce~~ a ~~range~~ ofpatient ~~cell-based~~achieves ~~products,~~remission ~~such~~in asan ~~monoclonal~~effort ~~antibodies,~~to ~~other~~extend ~~secreted~~that ~~proteins,~~remission ~~virus,~~or ~~virus-like~~avoid ~~particles, vaccines, and whole cells~~relapse. ~~Our~~BiovaxID ~~smaller~~is ~~cell~~a ~~culture~~therapy ~~systems~~designed ~~can~~to be ~~scaled-up~~administered to ~~any~~lymphoma ofpatients ~~our~~who ~~larger~~have ~~cell~~achieved ~~culture~~complete ~~systems.~~remission Weafter ~~utilize scaled-up~~initial ~~methods~~chemotherapy intreatment. ~~our~~If ~~hollow~~approved, ~~fiber~~BiovaxID ~~systems~~would ~~because~~represent ~~they~~a ~~are~~new ~~linear~~class ~~and predictable, which is not true~~ of ~~competing~~drugs ~~technologies.~~available ~~Our~~to ~~cell~~treat ~~culture~~FL ~~system~~and ~~product~~potentially ~~line,~~offering ina ~~order~~new oftreatment ~~increasing~~option ~~capacity,~~for ~~includes:~~FL patients.

HFBiovaxID ~~PRIMER™:~~is ~~The~~the HFonly ~~Primer~~personalized iscancer avaccine ~~low-cost~~for ~~cell~~treatment ~~culture~~of ~~system~~FL ~~capable~~that ofhas ~~producing~~demonstrated ~~small~~significant clinical benefit in a Phase 3 clinical trial. Two other vaccines, ~~research~~MyVaxTM developed by Genitope and ~~development~~Specifid™ ~~quantities~~developed ofby ~~the~~Favrille ~~cell culture~~which ~~products~~were ~~from~~studied ~~mammalian~~in ~~cell~~Phase ~~lines.~~3 ~~The~~clinical HFtrials ~~Primer~~in ~~also~~FL ~~provides~~patients adid ~~relatively~~not ~~inexpensive~~report ~~option~~statistically tosignificant ~~evaluate~~clinical benefit and we believe are no longer under development. There are fundamental structural differences between BiovaxID and the ~~efficacy~~cancer ofvaccines ~~new~~developed ~~cell~~by ~~lines~~Genitope orand ~~applications~~Favrille; inGenitope ~~perfusion~~and ~~technology~~Favrille ~~that~~manufactured ~~can~~their ~~then~~respective bevaccines ~~scaled-up~~with IgG isotypes without regard to ~~any~~the ofpatient’s ~~our~~actual ~~larger~~isotype ~~cell~~and ~~culture systems.~~their HFclinical ~~Primer~~trial isdesigns aunder ~~single-use~~which the clinical efficacy of these vaccines were tested were different, ~~fully~~which ~~disposable~~we ~~product~~believe ~~that~~explain ~~requires~~why noBiovaxID ~~investment~~achieved insignificant ~~custom~~clinical ~~equipment.~~benefit while Genitope and Favrille’s vaccines did not.

~~MULTI-6™:~~Chemotherapy ~~The~~and ~~Multi-6~~monoclonal isantibodies aare ~~low-cost~~widely ~~cell~~used ~~culture~~for ~~system~~the ~~capable~~treatment of ~~simultaneously~~FL. ~~producing~~Although ~~small,~~chemotherapy ~~research~~ and ~~development~~ ~~-scale~~monoclonal ~~quantities~~antibodies ofcan ~~six~~substantially ~~different~~reduce ~~cell culture products. Optionally,~~ the ~~Multi-6~~tumor ~~can~~mass beand ~~used~~in tomost ~~produce~~instances ~~one~~achieve ~~cell~~clinical ~~culture~~remission, ~~product~~the atremission ~~a rate that~~ is ~~six-fold~~generally ~~higher~~of ~~than~~limited ~~the HF Primer~~duration. ~~This~~FL ~~flexibility~~patients ~~allows~~generally arelapse ~~researcher~~and tothe ~~operate~~cancer ~~one Multi-6~~usually ~~instead~~becomes ofincreasingly ~~managing~~resistant ~~six~~to ~~separate~~further HFchemotherapy ~~Primer systems running side-by-side~~treatments. ~~Multi-6~~The ~~applications~~patient’s ~~can~~response ~~be scaled-up~~ to ~~our~~therapy ~~larger~~becomes ~~AutovaxID®~~briefer orand ~~other~~weaker ~~cell~~with ~~culture~~each ~~systems~~additional ~~listed~~course ~~below~~of therapy, ifsuch ~~the~~that ~~need~~eventually ~~arises.~~further ~~Multi-6~~chemotherapy iswould aoffer ~~single-use, fully disposable product that requires~~ no ~~investment~~clinical ~~in custom equipment~~benefit.

~~AUTOVAXID®:~~A ~~The~~number ~~AutovaxID~~of ispassive ~~our most advanced~~immunotherapies, ~~fully~~such ~~automated~~as ~~cell~~rituximab ~~culture system. Its setup~~ and ~~operation~~radioimmunotherapeutic ~~requires~~agents ~~very~~(radioisotopes ~~little~~linked ~~technician expertise and labor in comparison~~ to ~~competing~~monoclonal ~~cell~~antibodies), ~~culture~~are ~~system~~approved ~~technologies~~by ~~and~~the ~~even~~FDA ~~our~~for ~~other~~the ~~cell~~treatment ~~culture~~of ~~systems listed below~~FL. ~~The~~A ~~AutovaxID~~monoclonal ~~was~~antibody ~~designed~~is ~~from the beginning to: enable multi-product facilities, capture most all production information into its CFR 21 Part 11-compliant electronic records system, and operate as~~ a ~~fully~~type ~~closed-system~~of ~~biologics-manufacturing~~antibody ~~platform.~~produced ~~The AutovaxID allows supervisors to implement built-~~in ~~software~~large ~~controls~~quantity tothat ~~ensure~~is ~~technicians~~specific ~~adhere~~ to ~~strictly~~an ~~defined~~antigen ~~production protocols~~that ~~for cGMP environments or remove this feature when it~~ is ~~not~~expressed ~~needed,~~by ~~such~~tumor ascells ~~in research~~ and ~~development~~also ~~operations.~~by ~~There~~some ~~are~~normal ~~four~~cells. ~~single-use~~These ~~AutovaxID~~therapies ~~disposables~~have tobeen ~~provide~~used ~~researchers~~as ~~the~~primary ~~needed~~treatment ~~flexibility to go from research~~ and ~~development-~~ ~~through~~also ~~pilot-scale~~as ~~production.~~part ~~One~~ of ~~the~~combination ~~disposable~~induction ~~options~~therapy ~~even~~including ~~allows~~chemotherapy ~~the~~and ~~simultaneous~~rituximab ~~culturing~~based oftherapy ~~three~~is ~~different~~considered ~~cell lines~~ to ~~produce~~be ~~three~~the ~~different~~standard ~~products~~of incare ~~small quantities. When needed, one cell line can then be scaled-up~~ to ~~AutovaxID’s~~treat ~~larger-capacity disposables~~FL. WeIn ~~plan~~an toeffort ~~utilize AutovaxID’s advanced capabilities~~ to ~~streamline~~prolong ~~commercial~~the ~~manufacture~~duration of ~~BiovaxID™. AutovaxID is~~ the ~~first~~clinical ~~cell~~remission ~~culture~~monoclonal ~~system~~antibodies ~~that enables production of personalized cell-based treatments economically and in compliance with cGMP standards. Additionally, we~~ have ~~contracted~~increasingly ~~with~~been ~~the~~used ~~DoD and others to further develop the AutovaxID and related hollow fiber bioreactor systems to explore potential production of additional vaccines, including vaccines for viral indications such~~ as ~~influenza~~maintenance ~~and other contagious diseases~~therapies.

~~ACUSYST-MINIMAX®:~~If ~~The~~approved ~~miniMAX is an economical system that provides the flexibility and technology needed~~ to ~~support~~treat ~~optimization~~FL, ~~studies~~BiovaxID ~~and~~will ~~research-~~face ~~through~~competition ~~pilot-scale production~~from ofother ~~the~~approved ~~cell~~drugs, ~~culture~~including ~~products~~rituximab ~~listed above~~maintenance. ~~The~~Penetrating ~~miniMax is~~ a ~~tabletop~~market ~~instrument~~and ~~that~~achieving ~~uses~~usage ~~simple,~~by ~~but~~physicians ~~robust, microprocessors to automatically control pH, incubator temperature, fluid-flow dynamics,~~ and ~~seven~~patients ~~process pumps. This system offers two single-use disposables options to meet varying production requirements. Optimization results determined~~ in the ~~miniMAX~~face ~~can~~of bean ~~transferred~~established tostandard ~~our~~of ~~larger~~care ~~systems listed below. The production capacity~~ is ~~equivalent~~anticipated to anrepresent ~~AutovaxID,~~a ~~but~~significant ~~the miniMAX~~marketing ~~does not have the advanced features, controls, simpler setup and ease of operation available through the AutovaxID~~challenge.

~~ACUSYST-MAXIMIZER®:~~If ~~The~~approved ~~Maximizer~~to istreat anMCL, ~~economical~~BiovaxID ~~system with~~will abe ~~design~~required ~~that is similar~~ to ~~the~~compete ~~miniMAX~~with ~~system.~~other ~~This~~approved ~~system~~and/or ~~has~~development ~~all~~therapies offor the ~~features~~treatment of ~~miniMAX,~~MCL. ~~using~~There ~~single-use~~is ~~disposables~~currently ~~that~~no ~~either~~consensus ~~match~~standard orof ~~double~~care ~~the~~for ~~production capacity of~~ the ~~miniMAX~~first ~~system.~~line ~~The~~treatment ~~Maximizer~~of isMCL; anhowever, ~~economical~~there ~~system~~are ~~for process~~a ~~development~~number ~~and~~of ~~routine~~FDA-approved ~~productions.~~agents ~~The~~used ~~Maximizer~~for ~~offers~~ the ~~flexibility~~treatment of ~~four~~MCL ~~single-use~~both ~~disposables~~in tofirst ~~meet~~line ~~varying~~settings ~~production~~and ~~requirements.~~in ~~Production~~patients ~~processes determined~~ in ~~the Maximizer can be scaled-up to our largest cell culture system, AcuSyst-Xcellerator®~~relapse.

~~ACUSYST-XCELLERATOR®:~~COMPETITION ~~The~~FOR Xcellerator is a freestanding, production-scale cell culture system that has been used for production of a FDA-licensed biologic. The Xcellerator contains an incubator, a refrigerator, a built-in computer that has a CFR 21 Part 11-compliant electronic records system, numerous process pumps, and a touch screen for local control. The Xcellerator supports remote monitoring and/or control via standard web browsers. The system supports two independent single-use disposables and, therefore, can simultaneously culture two different cell lines to produce two products. The Xcellerator has a production capacity that is equivalent to a 20x scale-up of AutovaxID’s capacity. AUTOVAXID®

20There are many kinds of technologies for the manufacture of cell-based products. The technology relied upon by our instruments and disposables referred to as hollow fiber perfusion which is not widely accepted for large-scale manufacturing and, notwithstanding our development efforts, may not become widely accepted in the future. Our hollow fiber bioreactors must compete with many other kinds of cell-based manufacturing instruments including, but not limited to, stirred-tank reactors; airlift fermentors; roller bottles; packed bed reactors; two-chamber reactors; ceramic matrix systems; batch fermentation techniques; and WAVE bioreactors. There can be no assurance that our hollow fiber systems will gain widespread acceptance competing with other established technologies marketed by industry leaders such as General Electric, Lonza, 3M, Sartorius Stedim, Thermo Scientific and Sandoz Biopharmaceuticals.

~~Table~~Competition for cell-based instruments is intense. Most of ~~Contents~~the developers, manufacturers and marketers of cell-based manufacturing instruments are much larger, more entrenched with potential customers and better financed than us which places us at a competitive disadvantage.

In addition to instrument and disposables sales, we have recurring revenue from the sale of hollow fiber bioreactors, cultureware, tubing sets and other disposable products and supplies for use with our cell culture system instrument product line. Revenues from such disposable products represented approximately 73% and 59% of our total revenue from this business segment for both the years ended September 30, 2012 and 2011, respectively. 24

~~Currently~~PATENTS, weTRADEMARKS ~~assemble,~~AND ~~validate~~PROTECTION ~~and~~OF ~~package the~~PROPRIETARY instruments and disposables, cell culture products and services which we sell. Customers for our instruments and disposables are the same potential customers targeted for our contract cell culture products and services which include biopharmaceutical and biotechnology companies, medical schools, universities, research facilities, hospitals and public and private laboratories. TECHNOLOGY

~~Proprietary~~We ~~Rights~~are pursuing a number of methods to ~~Instruments~~establish and ~~Disposables~~maintain market exclusivity for our product candidates to the greatest extent possible, including seeking patent protection, the use of statutory market exclusivity provisions, and otherwise protecting our intellectual property.

WeOur ~~own several~~success ~~patents~~depends ~~covering~~in ~~various~~part ~~aspects~~on of our ~~hollow~~ability ~~fiber~~to ~~perfusion~~obtain ~~process, instruments~~ and maintain proprietary ~~cell~~protection ~~culturing~~for ~~methods.~~our Weproduct ~~own~~candidates, ~~U.S.~~technology, ~~Patent~~and ~~No. 6,001,585,~~know-how; ~~which~~to ~~protects~~operate ~~the~~without HFinfringing ~~Primer™~~the ~~cell~~proprietary ~~culture~~rights ~~system~~of others; and ~~its~~to ~~use~~prevent ~~in screening~~others ~~cell~~from ~~lines~~infringing ~~and~~on ~~process~~our ~~conditions~~proprietary rights. ~~Although~~Our ~~the~~policy HFis ~~Primer~~to isseek ~~impractical~~to ~~for~~protect ~~large-scale~~our ~~vaccine~~proprietary ~~production~~position by, itamong ~~may~~other bemethods, ~~used~~filing asU.S. anand ~~efficient~~foreign ~~screening~~patent ~~tool~~applications when possible relating to ~~cost-effectively~~our ~~determine~~proprietary ~~how~~technology, ~~well~~inventions, aand ~~cell~~improvements ~~line~~that ~~will~~are ~~perform~~important into aour ~~hollow~~business. ~~fiber system,~~We ~~such~~also asrely ~~the~~on ~~AutovaxID®~~trade ~~instrument~~secrets, ~~which~~know-how, iscontinuing ~~used~~technological innovation, and in-licensing ~~the~~opportunities ~~production~~to ofdevelop ~~BiovaxID™.~~and ~~U.S.~~maintain ~~Patent No~~our proprietary position. ~~6,001,585~~ ~~will~~The ~~expire~~following inis ~~November~~information ~~2017.~~regarding our owned and licensed patents and patent applications that we consider material to our business:

We ~~have~~own ~~also~~several ~~filed~~patents ~~U.S.~~covering ~~and~~various ~~foreign~~aspects ~~patent~~of ~~applications~~our ~~relating~~hollow tofiber ~~certain~~perfusion ~~features~~process, ofinstruments ~~the AutovaxID~~and ~~instrument~~proprietary cell culturing methods. ~~Several~~Our patents ~~have~~also ~~been~~cover ~~granted~~aspects inof ~~the~~our EUtherapeutic ~~covering~~vaccine ~~the~~production ~~AutovaxID’s~~process. ~~extra-capillary~~We ~~(“EC”)~~plan ~~fluid~~to ~~cycling~~continue ~~system,~~pursuing ~~which~~patent ~~enables~~and ~~control~~other ofintellectual ~~fluid~~property ~~volumes~~protection infor ~~the~~our ~~hollow~~product ~~fiber~~candidates, ~~bioreactor~~our ~~during~~technology ~~manufacture~~and ~~of BiovaxID~~know-how. inCurrently, awe ~~closed~~have three issued U.S. patents. Additionally, ~~contamination-free~~we ~~environment~~have several patent applications that are pending. ~~These~~Our EUpresently issued U.S. patents will ~~remain~~expire in ~~force~~November ~~until~~2017 ~~2027~~and July 2029. A list of our U.S. and foreign patents and published patent applications are as follows:

We have filed (a) a PCT application covering the use of AutovaxID instrumentation for rapid, large-scale production of virus, virus-like particles, and viral vaccines at a high yield, (b) a PCT application concerning an integrated apparatus and method for production and purification of antibodies, and (c) a provisional application concerning cultureware modules and biomanufacturing suites for large-scale production of cells and cell-derived products such as antibodies, proteins, virus, and virus-like particles.

Patent No.	Title and Inventor(s)	Filing Date/Issue Date	Expiration Date

6,001,585	MICRO HOLLOW FIBER BIOREACTOR by Michael J. Gramer	Nov. 14, 1997/Dec 14, 1999	Nov. 14, 2017

8,383,397	Method and System for the Production of Cells and Cell Products and Applications Thereof by Robert J. Wojciechowski et al.	Nov. 20, 2008/February 26, 2013	July 30, 2029

8,540,499	Extra-Capillary Fluid Cycling System and Method for a Cell Culture Device by Darrell P. Page et al.	Nov. 20, 2008/Sept. 24, 2013	July 4, 2029

CELL CULTURE PRODUCTS AND SERVICES

Foreign Patent No.	Title and Inventor(s)	Filing Date/Issue Date	Expiration Date
EP 2027247 (UK)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.	Nov. 20, 2008/Jan. 26, 2011	May 21, 2027

DE602007012238D (Germany)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.	Nov. 20, 2008/Jan. 26, 2011	May 21, 2027

AT2027247 (Austria)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.	Nov. 20, 2008/Jan. 26, 2011	May 21, 2027

P2027247 (Switzerland)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.	Nov. 20, 2008/Jan. 26, 2011	May 21, 2027

FR2027247 (France)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.	Nov. 20, 2008/Jan. 26, 2011	May 21, 2027

GB2027247 (Great Britain)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.	May 21, 2007/Jan. 26, 2011	May 21, 2027

HK1166343 (Hong Kong)	METHOD AND SYSTEM FOR THE PRODUCTION OF CELLS AND CELL PRODUCTS AND APPLICATIONS THEREOF by Robert J. Wojciechowski et al.	May 21, 2007/October 26, 2012

We manufacture mammalian cell culture products such as, whole cells, recombinant and secreted proteins, and monoclonal antibodies. Additionally, we provide related services as a contract resource to assist our customers in developing cell production process protocols, cell line optimization, cell culture production optimization, media evaluation and other related services. This segment of our business represented approximately $0.8 million (approximately 22%) and $1.3 million (approximately 33%) in revenues for the years ended September 30, 2012 and 2011, respectively. 25

With our focus on pre-launch therapeutics and marketed diagnostics production, we serve all the manufacturing needs of our customers. From process development to regulatory support, our one-stop comprehensive approach provides solutions for clients that have chosen to temporarily or permanently outsource any or all stages of drug development. If needed, commercial production capacity for product launch is seamless, we provide all the required regulatory support, including biocompatibility studies.

Application Publication No.	Title and Inventor(s)	Filing Date/Publication Date	Countries/Regions
WO 2012/021840	MATERIALS AND METHODS FOR DESIGNING AUTOLOGOUS IDIOTYPE VACCINES AND TREATMENT OF B-CELL MALIGNANCIES by Carlos F. Santos, Ph.D. et al.	Aug. 12, 2011/Feb. 16, 2012	International

WO 2012/064760	MATERIALS AND METHODS FOR DIRECTING AN IMMUNE RESPONSE AGAINST AN EPITOPE by Carlos F. Santos, Ph.D. et al.	Nov. 9, 2011/May 18, 2012	International

EP 2637691	MATERIALS AND METHODS FOR DIRECTING AN IMMUNE RESPONSE TO AN EPITOPE by Carlos F. Santos, Ph.D. et al.	Nov. 8, 2011/Sept. 18, 2013	Europe

WO 2012/171026	METHOD AND APPARATUS FOR VIRUS AND VACCINE PRODUCTION by Mark Hirschel et al.	June 11, 2012/Dec. 13, 2012	International

WO 2013/086418	TUMOR-SPECIFIC GM-CSF CYTOKINE RESPONSE AS PREDICTOR OF CANCER VACCINE EFFECTIVENESS by Wyndham H. Wilson et al.	Dec. 7, 2012/June 13, 2013	International

US 2013/0058907	METHOD AND SYSTEM FOR THE PRODUCTION OF CELLS AND CELL PRODUCTS AND APPLICATIONS THEREOF by Robert J. Wojciechowski et al.	October 30, 2012/March 7, 2013	United States

WO 2012/171030	METHOD AND APPARATUS FOR ANTIBODY PRODUCTION AND PURIFICATION by Mark Hirschel et al.	June 11, 2012/Dec. 13, 2012	International

~~With~~We ~~nearly~~have 30filed ~~years~~PCT ofapplications ~~expert~~based ~~experience~~on inor ~~cell~~related ~~culture,~~to wevarious ~~formulate~~aspects ~~the~~of ~~optimal strategy for~~ our ~~customers’~~analyses ~~biologics~~of ~~manufacturing. By~~clinical ~~accurately~~benefit ~~matching~~based ~~the~~on ~~level~~isotype, ofand ~~hollow~~to ~~fiber~~sequencing ~~bioreactor~~results ~~production~~matching ~~technology~~vaccine to ~~our~~antigen ~~customers’~~coverage ~~phase~~for ofthe ~~product~~ development, ~~our~~of ~~customers~~a ~~can~~companion ~~manage~~diagnostic ~~their~~and ~~overall~~to ~~investment~~use ~~risk.~~of ~~Only~~the asAutovaxID® ~~products~~instrument ~~advance~~for to the ~~next~~production ~~stage~~ of ~~development do~~viruses, ~~we scale to higher~~virus-~~output~~like ~~production~~particles, ~~systems.~~and ~~Customers~~antiviral ofvaccines ~~our~~such ~~cell~~as ~~culture~~those ~~products~~targeting influenza and ~~services~~other ~~are~~contagious ~~biopharmaceutical~~diseases. In ~~and~~addition ~~biotechnology~~to ~~companies,~~its ~~medical~~independent ~~schools, universities,~~ research ~~facilities, hospitals~~ and ~~public~~development ~~and~~programs, ~~private laboratories.~~it Weis ~~generally~~anticipated ~~produce~~that ~~cell~~our ~~culture~~collaborations ~~products~~with ~~pursuant~~industry toand ~~contracts~~research ~~which~~partners ~~specify~~will ~~the~~generate ~~customer’s~~additional ~~requirements~~valuable ~~for~~intellectual ~~the~~property, ~~cell~~which ~~culture~~will ~~products~~be towholly-owned, bejointly ~~produced~~owned and/or ~~the~~licensed ~~services~~ to ~~be performed~~us.

21We also possess licensed intellectual property used in the development and manufacture of BiovaxID. BiovaxID is manufactured with a proprietary cell line, which we have licensed on a world-wide exclusive basis from Stanford. This is significant, because we believe that the use of any cell line other than our exclusively licensed cell line, in the production of a similar idiotype vaccine, would require filing a separate IND application and undergoing clinical testing evaluation by the FDA.

~~Table~~Additionally, we consider trademarks to be important to our business. We have established trademarks covering various aspects of ~~Contents~~our hollow fiber perfusion process, instruments and proprietary cell culturing methods (AutovaxID®, Acusyst-Maximizer® and Acusyst-Xcell®). We have applied for the U.S. and foreign registration of the trademark BiovaxID in connection with our therapeutic cancer vaccine and Autovax™ in connection with our instrument used in the manufacture of BiovaxID. We plan to continue aggressively pursuing trademark and other proprietary protection for our therapeutic vaccine technology and instrumentation, both nationally and internationally.

~~There~~Our ~~are~~ability ~~various processes commonly used~~ to ~~expand~~maintain ~~mammalian~~and ~~cells~~solidify ~~generally~~our ~~used~~proprietary position for ~~the~~our ~~production~~technology ~~of antibodies.~~will ~~These~~depend ~~may~~on ~~include~~our ~~hollow~~success ~~fiber~~in ~~bioreactor~~obtaining ~~perfusion,~~effective ~~stirred~~claims ~~tank~~and ~~fermentation,~~enforcing ~~roller~~those ~~bottle~~claims ~~and~~once ~~other processes~~granted. We ~~primarily~~do ~~use~~not ~~hollow~~know ~~fiber~~whether ~~bioreactor~~any ~~technology~~of toour ~~expand~~patent ~~customer~~applications ~~provided~~or ~~cell~~those ~~lines~~patent ~~and~~applications ~~produce~~that ~~the~~we ~~respective monoclonal~~license ~~antibodies.~~will ~~This~~result ~~technology~~in ~~grows~~the ~~cells~~issuance toof ~~higher~~any ~~densities~~patents. ~~which~~Our ~~more~~issued ~~closely~~patents ~~mimics~~and ~~mammalian~~those ~~physiology.~~that Wemay ~~have~~issue ~~significant expertise with~~ in ~~vitro (outside~~ the ~~living~~future, ~~body)~~or ~~cell~~those ~~culture~~licensed ~~methods~~to ~~for~~us, amay ~~wide~~be ~~variety~~challenged, ofinvalidated, ~~mammalian~~or ~~cells. Mammalian~~circumvented, ~~cells~~which ~~are~~could ~~complicated~~limit ~~and~~our ~~dynamic,~~ability ~~with~~to ~~constantly~~stop ~~changing~~competitors ~~needs.~~from Amarketing ~~primary~~related ~~component~~products ofor ~~hollow~~the ~~fiber~~length ~~bioreactors~~of isterm ~~fibers made~~ of ~~plastic~~patent ~~polymers.~~protection ~~The~~that ~~fibers~~we ~~are~~may ~~hair-like~~have ~~with~~for ~~hollow~~our ~~centers~~product ~~which simulate human capillaries~~candidates. ~~Thousands of~~In ~~these~~addition, ~~fibers~~the ~~are~~rights ~~inserted~~granted inunder aany ~~cartridge,~~issued ~~which~~patents wemay ~~refer~~not toprovide asus awith ~~bioreactor.~~proprietary ~~The~~protection ~~cells~~or ~~are~~competitive ~~grown~~advantages onagainst ~~the~~competitors ~~outside~~with ofsimilar ~~the~~technology. ~~hollow~~Furthermore, ~~fibers~~our ~~while~~competitors ~~nutrient~~may ~~media~~independently ~~used~~develop tosimilar ~~support~~technologies ~~cell~~or ~~growth~~duplicate isany ~~perfused~~technology ~~through~~developed ~~the~~by ~~lumen~~us. Because of the ~~fibers.~~extensive ~~The~~time ~~fiber~~required ~~walls have~~for ~~small pores~~development, ~~allowing~~testing ~~nutrients to pass from the hollow center to the cells. The fibers act as filters~~ and ~~yield~~regulatory ~~concentrated~~review ~~secreted~~of ~~products.~~a ~~Because~~potential ~~the~~product, ~~cells~~it ~~are~~is ~~immobilized~~possible inthat, ~~the~~before ~~bioreactor,~~any ~~the~~of ~~concentrated~~our product candidates can be ~~harvested during~~commercialized, ~~the~~any ~~ongoing~~related ~~cell~~patent ~~growth~~may ~~process.~~expire ~~Hollow~~or ~~fiber~~remain ~~technology~~in ~~permits~~force ~~harvests~~for ofonly ~~cell~~a ~~culture~~short ~~products~~period ~~with~~following ~~generally~~commercialization, ~~higher purities~~ thereby reducing ~~the~~any ~~cost~~advantage of ~~downstream purification processes. This technology generally minimizes~~ the ~~amount of costly nutrient media required for cell growth~~patent.

The most generally used process for mammalian cell production is stirred tank fermentation. Hollow fiber bioreactor technology can be contrasted with the competitive stirred tank fermentation process which takes place in tanks of various sizes. Cells are grown inside the tanks in culture medium which is maintained under controlled conditions and continuously stirred to stimulate growth. At the end of the growing process, as opposed to incrementally during the growth process, cells are separated from the medium and the protein of interest is isolated through a series of complex purification processes. The size of the tanks generally result in stirred tank fermentation facilities requiring significantly more start-up costs, space and infrastructure than comparable production facilities using hollow fiber technology. While stirred tank fermentation and hollow fiber technology are both used for cell production of various quantities, we believe that the stirred tank fermentation process is currently more commonly used for larger scale commercial production requirements. We believe that hollow fiber technology has advantages in scalability, start-up time and cost in the early development of antibody production. 26

~~Our~~We ~~patented~~rely ~~hollow~~in ~~fiber~~some ~~technology~~circumstances ison ~~the~~trade ~~key~~secrets to ~~optimizing~~protect our ~~customers’~~technology, ~~biologics~~particularly ~~manufacturing.~~with ~~For~~respect ~~Phase~~to I,certain ~~Phase~~aspects IIof ~~and~~our ~~Phase~~BiovaxID ~~III~~manufacturing ~~cGMP~~process. ~~production~~However, ~~our~~trade ~~hollow~~secrets ~~fiber~~are ~~bioreactor~~difficult ~~perfusion technology~~to ~~provides~~protect. ~~economic~~We ~~advantages~~seek ~~through~~to ~~largely~~protect ~~automated~~our ~~culture~~proprietary oftechnology aand ~~relatively large~~processes, ~~densely packed population of cells~~ in ~~a small space. Additionally~~part, ~~the~~by ~~low~~confidentiality ~~molecular~~agreements ~~weight~~with ~~cut-off~~our ofemployees, ~~the~~consultants, ~~fiber~~scientific ~~membrane~~advisors, ~~allows~~and ~~more~~other ~~expensive~~contractors. ~~media components~~These toagreements may be ~~conserved~~breached, ~~while~~and ~~less~~we ~~expensive~~may ~~basal~~not ~~media~~have isadequate ~~continuously~~remedies ~~perfused~~for ~~through~~any ~~the bioreactor~~breach. AsIn ~~a result~~addition, ~~this~~our ~~automated~~trade ~~approach~~secrets ~~can~~may beotherwise ~~more~~become ~~cost-effective~~known ~~than~~or ~~conventional~~be ~~platforms~~independently ~~generally~~discovered ~~used~~by ~~for maintenance of large cell populations~~competitors. InTo the ~~expanding~~extent ~~field~~that ofour ~~personalized~~employees, ~~medicine~~consultants, ~~where~~or ~~patient~~contractors ~~specific~~use ~~drugs~~intellectual ~~and~~property ~~therapeutics~~owned ~~are~~by ~~frequently~~others ~~envisioned,~~in ~~such~~their aswork ~~BiovaxID™~~for us, wedisputes ~~believe~~may ~~that~~arise ~~hollow~~as ~~fiber~~to ~~technology~~the ~~may~~rights bein ~~the~~related ~~appropriate~~or ~~cell~~resulting ~~culture~~know-how ~~production technology.~~and inventions.

~~COMPETITION~~GOVERNMENT ~~FOR BIOVAXID™~~ REGULATION

~~Biotechnology~~Government ~~has~~authorities ~~experienced~~in the U.S. at the federal and state local levels and in foreign countries extensively regulate, among other things, the research, development, testing, manufacture, labeling, promotion, advertising, distribution, sampling, marketing, and isimport ~~expected~~and export of pharmaceutical products, biologics, and medical devices. All of our product candidates in development will require regulatory and/or marketing approval by government agencies prior to ~~continue~~commercialization. In particular, human therapeutic products are subject to ~~experience~~rigorous preclinical and clinical trials and other approval procedures of the FDA and similar regulatory authorities in foreign countries. Various federal, ~~rapid~~state, local, and ~~significant~~foreign ~~change~~statutes and regulations also govern testing, manufacturing, safety, labeling, storage, and record-keeping related to such products and their marketing. The ~~use~~process of ~~monoclonal~~obtaining ~~antibodies~~these asapprovals ~~initial~~and orthe ~~induction~~subsequent ~~therapy~~process of maintaining substantial compliance with appropriate federal, state, local, and ~~increasingly~~foreign ~~for~~statutes ~~maintenance therapy,~~and ~~has~~regulations ~~become~~require the expenditure of substantial time and financial resources. The FDA regulates drugs and well-~~established~~characterized biologics under the Federal Food, Drug, and ~~generally~~Cosmetic ~~accepted.~~Act ~~Products~~(“FDCA”), and implementing regulations that are ~~well-established~~adopted orunder ~~accepted~~the FDCA. In the case of biologics, ~~including~~the ~~monoclonal~~FDA ~~antibodies~~regulates such asproducts ~~Rituxan®,~~under ~~may~~the ~~constitute~~Public ~~significant~~Health ~~barriers~~Service Act. If we fail to ~~market~~comply ~~penetration~~with the applicable requirements under these laws and ~~regulatory~~regulations ~~approval~~at ~~which~~any ~~may~~time beduring ~~expensive~~the product development process, ~~difficult~~approval process, or ~~even~~after ~~impossible~~approval, we may become subject to ~~overcome~~administrative or judicial sanctions. ~~New~~These ~~developments in~~sanctions ~~biotechnological~~could ~~processes~~include ~~are~~the ~~expected~~FDA’s refusal to ~~continue~~approve atpending aapplications, ~~rapid~~withdrawals ~~pace~~of inapprovals, ~~both~~clinical ~~industry~~holds, ~~and~~warning ~~academia~~letters, ~~and~~product ~~these~~recalls, ~~developments~~product ~~are~~seizures, ~~likely~~total toor ~~result~~partial insuspension ~~commercial~~of ~~applications~~its ~~competitive~~operations, ~~with~~injunctions, ~~BiovaxID.~~fines, Wecivil ~~expect~~penalties toor ~~encounter~~criminal ~~intense~~prosecution. ~~competition~~Any ~~from~~agency enforcement action could have a ~~number~~ ofmaterial ~~companies~~adverse ~~that~~effect ~~offer~~on ~~products~~us. inThe ~~our~~FDA ~~targeted~~also ~~application~~administers ~~area~~certain controls over the export of drugs and biologics from the U.S. Any Wefailure ~~anticipate~~by ~~that~~us, our ~~competitors~~suppliers of manufactured drug product, collaborators or licensees to obtain or maintain, or any delay in ~~these~~obtaining, ~~areas~~regulatory ~~will~~approvals ~~consist~~could adversely affect the marketing of ~~both~~our ~~well-established~~product candidates and ~~development-stage~~our ~~companies~~ability to receive product revenue, license revenue or profit sharing payments. In addition, statutes, rules, regulations, and ~~will~~policies ~~include:~~may change and new legislation or regulations may be issued that could delay such approvals.

•The ~~healthcare~~FDA ~~companies~~has extensive regulatory authority over biopharmaceutical products (drugs and diagnostic products produced from biologic processes). The principal FDA regulations that pertain to our cell production activity include, but are not limited to 21CFR Parts 600 and 610 – General Biological Products and Standards; 21 CFR Parts 210 and 211 – current Good Manufacturing Practices for Finished Pharmaceuticals; 21 CFR Part 820 – Quality System Regulations (medical devices); and 21 CFR Part 58 – Good Laboratory Practice for Non-Clinical Laboratory Studies. FDA’s guidelines include controls over procedures and systems related to the production of mammalian proteins and quality control testing of any new biological drug or product intended for use in humans (including, to a somewhat lesser degree, in vivo biodiagnostic products). FDA guidelines are intended to assure that the biological drug or product meets the requirements through rigorous testing with respect to safety, efficacy, and meet the purity characteristics for identity and strength. FDA approvals for the use of new biological drugs or products (that can never be assured) require several rounds of extensive preclinical testing and clinical investigations conducted by the sponsoring pharmaceutical company prior to sale and use of the product. At each stage, the approvals granted by the FDA include the manufacturing process utilized to produce the product. Accordingly, our cell culture systems used for the production of therapeutic or biotherapeutic products (biological drug or product) are subject to significant regulation by the FDA under the FDCA.

•Our ~~chemical~~cell culture systems used to produce cells for diagnostic uses are regulated under the FDCA as Class I medical devices. Medical devices are classified by the FDA into three classes (Class I, Class II and ~~biotechnology~~Class ~~companies;~~III) based upon the potential risk to the consumer posed by the medical device (Class I medical devices pose the least amount of risk, while Class III medical devices and “new” devices are presumed to inherently pose the greatest amount of risk). As Class I medical devices, our systems must be manufactured in accordance with cGMP guidelines. Sales of such systems to customers using them to manufacture materials for clinical studies and licensure do not require prior FDA approval.

•The process of complying with FDA guidelines and obtaining approvals from the FDA of applications to market biopharmaceutical ~~companies;~~drugs and products is costly, time consuming and subject to unanticipated delays. There is no assurance that our customers will be able to obtain FDA approval for biological drugs and products produced with our systems, and failure to receive such approvals may adversely affect the demand for our services.

•Under ~~companies~~the ~~developing~~FDCA, our customers must establish and validate standard operating procedures (“SOPs”) utilizing our cell culture technologies in their drug ~~discovery~~master files. We provide assistance in operational, validation, calibration and preventive maintenance SOPs to customers, as needed, to support their product development and commercialization processes. For example, we will typically provide existing and prospective customers who are utilizing our contract production services or constructing production facilities based on our cell culture technologies with information to enable such customers to comply with the FDA’s guidelines required for facility layout and design. This information may be provided either in a drug/biologic master file that we give permission to customers to cross reference in their submission to the FDA, or provided to customers to include in their FDA submissions.

We expect to compete on, among other things, the safety and efficacy of our product candidates and more desirable treatment regimens, combined with the effectiveness of our experienced management team. Competing successfully will depend on our continued ability to attract and retain skilled and experienced personnel, to identify and secure the rights to and develop pharmaceutical products and compounds and to exploit these pharmaceutical products and compounds commercially before others are able to develop competitive products. 27

22As we currently do business in a significant number of countries, in addition to the requirements of the FDA, we are subject to the regulations of other countries and their governmental agencies which apply to our goods and services when sold in their jurisdiction.

~~Table~~We are subject to various regulations regarding handling and disposal of ~~Contents~~potentially hazardous materials, wastes and chemicals such as cells and their secreted waste products, including those enforced by the U.S. Environmental Protection Agency (“EPA”) and various state and local agencies.

~~The~~Pharmaceutical ~~use~~Product of monoclonal antibodies as initial or induction therapy, and increasingly for maintenance therapy, has become well-established and generally accepted. Products that are well-established or accepted, including monoclonal antibodies such as Rituxan®, may constitute significant barriers to market penetration and regulatory approval which may be expensive, difficult or even impossible to overcome. New developments in biotechnological processes are expected to continue at a rapid pace in both industry and academia, and these developments are likely to result in commercial applications competitive with BiovaxID. Regulation

IfRegulation ~~approved,~~by ~~BiovaxID~~governmental ~~will~~authorities ~~be required to compete with currently approved therapies, as well as therapies which may be approved~~ in the ~~future~~U.S. ~~There~~and ~~are currently~~other nocountries ~~approved~~is ~~active~~a ~~immunotherapeutic~~significant ~~drugs~~factor ~~which~~in ~~seek~~the tomanufacture ~~induce~~and anmarketing ~~adaptive,~~of ~~specific~~pharmaceuticals and ~~durable~~in ~~immune~~our ~~response~~ongoing toresearch ~~identify~~ and ~~eradicate~~development ~~the~~activities. ~~residual~~Most, ~~lymphoma~~if ~~cells~~not ~~remaining~~all, ~~after~~of aour ~~patient~~product ~~achieves~~candidates ~~remission~~require inregulatory anapproval ~~effort~~by togovernmental ~~extend that~~agencies ~~remission~~prior orto ~~avoid relapse~~commercialization. ~~BiovaxID~~In isthe acase ~~therapy~~of ~~designed~~biologics, tothey beare ~~administered~~subject to ~~lymphoma~~rigorous ~~patients~~preclinical ~~who~~testing ~~have~~and ~~achieved~~clinical ~~complete~~trials ~~remission~~and ~~after~~other ~~initial~~pre-marketing ~~chemotherapy~~approval ~~treatment.~~requirements Ifby ~~approved,~~the ~~BiovaxID~~FDA ~~would represent a new class of drugs available to treat FL~~ and ~~potentially~~foreign ~~offering~~regulatory ~~a new treatment option for FL patients~~authorities.

~~BiovaxID~~Each ~~is the only personalized cancer vaccine for treatment~~ of FL that has demonstrated significant clinical benefit in a Phase 3 clinical trial. Two other vaccines, MyVaxTM developed by Genitope and Specifid™ developed by Favrille which were studied in Phase 3 clinical trials in FL patients did not report statistically significant clinical benefit and we believe are no longer under development. There are fundamental structural differences between BiovaxID and the cancer vaccines developed by Genitope and Favrille; Genitope and Favrille manufactured their respective vaccines with IgG isotypes without regard to the patient’s actual isotype and their clinical trial designs under which the clinical efficacy of these ~~vaccines~~three ~~were~~phases ~~tested~~is ~~were~~discussed ~~different,~~further ~~which we believe explain why BiovaxID achieved significant clinical benefit while Genitope and Favrille’svaccines did not~~below.

~~Chemotherapy~~Preclinical and monoclonal antibodies are widely used for the treatment of FL. Although chemotherapy and monoclonal antibodies can substantially reduce the tumor mass and in most instances achieve clinical remission, the remission is generally of limited duration. FL patients generally relapse and the cancer usually becomes increasingly resistant to further chemotherapy treatments. The patient’s response to therapy becomes briefer and weaker with each additional course of therapy, such that eventually further chemotherapy would offer no clinical benefit. Phase

AThe ~~number~~activities ofrequired ~~passive~~before ~~immunotherapies,~~a ~~such~~product asmay ~~rituximab~~be marketed in the U.S. and ~~radioimmunotherapeutic~~other ~~agents (radioisotopes~~countries ~~linked~~begin towith ~~monoclonal~~preclinical ~~antibodies),~~testing ~~are~~not ~~approved~~involving byhuman subjects. The development of a new pharmaceutical agent begins with the ~~FDA~~discovery or synthesis of a new molecule or well-characterized biologic. These agents are screened for pharmacological activity using various animal and tissue models, with the ~~treatment~~goal of FLselecting a lead agent for further development. AAdditional ~~monoclonal~~studies ~~antibody~~are isconducted ato ~~type~~confirm ofpharmacological ~~antibody~~activity, ~~produced~~to ingenerate ~~large~~safety ~~quantity~~data, ~~that~~and to evaluate prototype dosage forms for appropriate release and activity characteristics. Once the pharmaceutically active molecule is ~~specific~~fully tocharacterized, an ~~antigen~~initial ~~that~~purity profile of the agent is ~~expressed~~established. byDuring ~~tumor~~this ~~cells~~and subsequent stages of development, the agent is analyzed to confirm the integrity and ~~also~~quality byof ~~some normal~~material ~~cells~~produced. ~~These~~In ~~therapies~~addition, ~~have~~development ~~been~~and optimization of the initial dosage forms to be used asin ~~primary~~clinical ~~treatment~~trials are completed, together with analytical models to determine product stability and ~~also~~degradation. asA ~~part~~bulk supply of ~~combination~~the ~~induction~~active ~~therapy~~ingredient ~~including~~to ~~chemotherapy~~support the necessary dosing in initial clinical trials must be secured. Upon successful completion of preclinical safety and ~~rituximab~~efficacy ~~based~~studies ~~therapy~~in animals, an IND submission is ~~considered~~prepared toand beprovided to the ~~standard~~FDA offor ~~care~~review prior to ~~treat~~commencement FLof human clinical trials. The IND consists of the initial chemistry, analytical, formulation, and animal testing data generated during the preclinical phase. In general, the review period for an ~~effort~~IND tosubmission ~~prolong~~is ~~the duration~~30 days, ofafter which, if no comments are made by the ~~clinical~~FDA, ~~remission~~the ~~monoclonal~~product ~~antibodies~~candidate ~~have~~can ~~increasingly~~be ~~been~~studied ~~used~~in asPhase ~~maintenance~~1 ~~therapies.~~clinical trials.

IfClinical approved to treat FL, BiovaxID will face competition from other approved drugs, including rituximab maintenance. Penetrating a market and achieving usage by physicians and patients in the face of an established standard of care is anticipated to represent a significant marketing challenge. Phase

IfFollowing ~~approved~~successful tosubmission ~~treat~~of ~~MCL~~an IND, ~~BiovaxID~~the ~~will~~sponsor beis ~~required~~permitted to ~~compete~~conduct ~~with~~clinical ~~other~~trials ~~approved~~involving ~~and/or~~the ~~development~~administration ~~therapies~~of ~~for~~ the ~~treatment~~ ofinvestigational ~~MCL.~~product ~~There~~candidate isto ~~currently~~human nosubjects ~~consensus~~under ~~standard~~the supervision of ~~care~~qualified ~~for~~investigators ~~the~~in ~~first~~accordance ~~line~~with ~~treatment~~good ofclinical ~~MCL;~~practice. ~~however~~Typically, ~~there~~clinical ~~are~~evaluation ainvolves ~~number~~the offollowing ~~FDA~~time-~~approved~~consuming ~~agents used for the treatment of MCL both in first line settings~~ and incostly ~~patients~~three-phase insequential ~~relapse.~~ process:

~~COMPETITION~~• ~~FOR~~Phase ~~AUTOVAXID®~~1. Phase 1 clinical trials are conducted in a limited number of healthy individuals to determine the drug or biologics’ safety and tolerability and include biological analyses to determine the availability and metabolization of the active ingredient following administration. The total number of subjects and patients included in Phase 1 clinical trials varies, but are generally in the range of 20 to 80 people.

~~There~~• ~~are~~Phase ~~many kinds of technologies for the manufacture of cell-based products~~2. ~~The~~ ~~technology~~Phase ~~relied~~2 ~~upon~~clinical bytrials ~~our~~involve ~~instruments~~administering ~~and~~the ~~disposables~~drug ~~referred~~ to asindividuals ~~hollow~~who ~~fiber~~suffer ~~perfusion~~from ~~which~~the istarget ~~not~~disease ~~widely~~or ~~accepted~~condition ~~for~~to ~~large-scale~~determine ~~manufacturing~~the ~~and,~~drug ~~notwithstanding~~or ~~our~~biologics’ ~~development~~potential ~~efforts,~~efficacy ~~may not~~and ~~become~~ideal ~~widely accepted in the future~~dose. ~~Our~~These ~~hollow~~clinical ~~fiber~~trials ~~bioreactors~~are ~~must~~typically ~~compete~~well ~~with many other kinds of cell-based manufacturing instruments including~~controlled, ~~but~~closely ~~not limited to~~monitored, ~~stirred-tank~~and ~~reactors;~~conducted ~~airlift~~in ~~fermentors;~~a ~~roller~~relatively ~~bottles;~~small ~~packed~~number ~~bed reactors;~~of ~~two-chamber~~patients, ~~reactors;~~usually ~~ceramic~~involving ~~matrix~~no ~~systems;~~more ~~batch~~than ~~fermentation~~several ~~techniques;~~hundred ~~and WAVE bioreactors~~subjects. ~~There~~ ~~can~~These beclinical notrials ~~assurance~~require ~~that~~scale ~~our~~up ~~hollow~~for ~~fiber~~manufacture ~~systems~~of ~~will~~increasingly ~~gain~~larger ~~widespread~~batches ~~acceptance~~of ~~competing~~bulk ~~with~~chemical. ~~other~~These ~~established~~batches ~~technologies marketed~~require byvalidation ~~industry~~analysis ~~leaders~~to ~~such~~confirm asthe ~~General~~consistent ~~Electric,~~composition ~~Lonza,~~of ~~3M,~~the ~~Sartorius~~drug ~~Stedim,~~or ~~Thermo Scientific and Sandoz Biopharmaceuticals~~biologics.

~~Competition~~• ~~for~~Phase ~~cell-based~~3. ~~instruments~~Phase is3 ~~intense.~~clinical ~~Most~~trials are performed after preliminary evidence suggesting effectiveness of ~~the~~a ~~developers~~drug or biologics has been obtained and safety (toxicity), ~~manufacturers~~tolerability, and ~~marketers~~an ofideal ~~cell-based~~dosing ~~manufacturing~~regimen ~~instruments~~have been established. Phase 3 clinical trials are ~~much larger,~~intended ~~more~~to ~~entrenched~~gather ~~with~~additional ~~potential~~information ~~customers~~about the effectiveness and ~~better~~safety ~~financed~~that ~~than~~is usneeded ~~which~~to ~~places~~evaluate usthe atoverall abenefit-risk ~~competitive~~relationship ~~disadvantage~~of the drug or biologics and to complete the information needed to provide adequate instructions for the use of the drug or biologics, also referred to as the Official Product Information. Phase 3 clinical trials usually include from several hundred to several thousand subjects.

23Throughout the clinical phase, samples of the product made in different batches are tested for stability to establish shelf life constraints. In addition, large-scale production protocols and written standard operating procedures for each aspect of commercial manufacture and testing must be developed.

~~Table of Contents~~28

~~PATENTS~~Phase 1, ~~TRADEMARKS~~2, ~~AND~~and ~~PROTECTION~~3 OFtesting ~~PROPRIETARY~~may ~~TECHNOLOGY~~ not be completed successfully within any specified time period, if at all. The FDA closely monitors the progress of each of the three phases of clinical trials that are conducted under an IND and may, at its discretion, reevaluate, alter, suspend, or terminate the testing based upon the data accumulated to that point and the FDA’s assessment of the risk/benefit ratio to the patient. The FDA may suspend or terminate clinical trials at any time for various reasons, including a finding that the subjects or patients are being exposed to an unacceptable health risk. The FDA can also request additional clinical trials be conducted as a condition to product approval. Additionally, new government requirements may be established that could delay or prevent regulatory and marketing approval of our product candidates under development. Furthermore, institutional review boards, which are independent entities constituted to protect human subjects in the institutions in which clinical trials are being conducted, have the authority to suspend clinical trials at any time for a variety of reasons, including safety issues.

WeNew ~~are~~Drug ~~pursuing~~Application aor ~~number~~Biologics ofLicense methods to establish and maintain market exclusivity for our product candidates to the greatest extent possible, including seeking patent protection, the use of statutory market exclusivity provisions, and otherwise protecting our intellectual property. Application

~~Our success~~After ~~depends~~the insuccessful ~~part~~completion onof ~~our~~Phase ~~ability~~3 toclinical ~~obtain~~trials, ~~and~~the ~~maintain~~sponsor ~~proprietary~~of ~~protection~~the ~~for~~new ~~our~~drug ~~product~~submits ~~candidates,~~a ~~technology~~NDA or BLA, ~~and~~in ~~know-how;~~the tocase ~~operate~~of ~~without~~biologics, ~~infringing~~to the ~~proprietary~~FDA ~~rights~~requesting ofapproval ~~others; and~~ to ~~prevent~~market ~~others~~the ~~from~~product ~~infringing~~for onone ~~our proprietary~~or ~~rights~~more indications. ~~Our~~A ~~policy~~NDA, isor toBLA, ~~seek~~is toa ~~protect~~comprehensive, ~~our~~multi-volume ~~proprietary~~application ~~position~~that byincludes, among other ~~methods~~things, ~~filing~~the ~~U.S.~~results of all preclinical and ~~foreign~~clinical ~~patent~~studies, ~~applications~~information ~~when~~about ~~possible~~the ~~relating~~drug’s tocomposition, ~~our~~and ~~proprietary~~the ~~technology~~sponsor’s plans for producing, ~~inventions~~packaging, and ~~improvements~~labeling ~~that~~the ~~are~~drug. ~~important to~~Under ~~our~~the ~~business.~~Pediatric WeResearch Equity Act of 2003, an application also ~~rely~~is onrequired ~~trade~~to ~~secrets,~~include ~~know-how~~an assessment, ~~continuing~~generally ~~technological~~based ~~innovation~~on clinical study data, on the safety and ~~in-licensing~~efficacy ~~opportunities~~of todrugs ~~develop~~for ~~and~~all ~~maintain~~relevant ~~our~~pediatric ~~proprietary~~populations ~~position~~before the NDA is submitted. The ~~following~~statute isprovides ~~information~~for ~~regarding~~waivers ~~our~~or ~~owned~~deferrals ~~and~~in ~~licensed~~certain ~~patents~~situations. ~~and patent~~In ~~applications~~most ~~that~~cases, wethe ~~consider~~NDA ~~material~~or BLA must be accompanied by a substantial user fee. In return, the FDA assigns a goal of 10 months from acceptance of the NDA or BLA to ~~our~~return ~~business:~~of a first “complete response,” in which the FDA may approve the product or request additional information.

WeThe ~~own~~submission ~~several~~of ~~patents~~the ~~covering~~application ~~various~~is ~~aspects~~no ofguarantee ~~our~~that ~~hollow~~the ~~fiber~~FDA ~~perfusion process,~~will ~~instruments~~find it complete and ~~proprietary~~accept ~~cell~~it ~~culturing~~for ~~methods~~filing. ~~Our~~The ~~patents~~FDA ~~also~~reviews ~~cover~~all ~~aspects~~NDAs ofand ~~our~~BLAs ~~therapeutic~~submitted ~~vaccine~~before ~~production~~it ~~process~~accepts them for filing. WeIt ~~plan~~may refuse to ~~continue~~file ~~pursuing~~the ~~patent~~application and ~~other~~request ~~proprietary~~additional ~~protection~~information rather than accept the application for ~~our~~filing, ~~product~~in ~~candidates~~which case, ~~our technology~~the ~~and~~application ~~know-how~~must be resubmitted with the supplemental information. ~~Currently~~After application is deemed filed by the FDA, wethe ~~have~~FDA ~~two~~reviews ~~issued~~an NDA or BLA to determine, among other things, whether a product is safe and effective for its intended use. The FDA has substantial discretion in the approval process and may disagree with an applicant’s interpretation of the data submitted in its NDA or BLA. Drugs that successfully complete NDA or BLA review may be marketed in the U.S., ~~patents~~subject to all conditions imposed by the FDA. ~~Additionally~~Prior to granting approval, wethe ~~have~~FDA ~~several~~generally ~~patent~~conducts ~~applications~~an ~~that~~inspection ~~are~~of ~~pending~~the facilities, including outsourced facilities, which will be involved in the manufacture, production, packaging, testing and control of the drug product for cGMP compliance. ~~Our~~The ~~presently~~FDA ~~issued~~will Unot approve the application unless cGMP compliance is satisfactory.S. ~~patents~~If the FDA determines that the marketing application, manufacturing process, or manufacturing facilities are not acceptable, it will ~~expire~~outline the deficiencies in ~~July~~the ~~2013~~submission and ~~November~~will ~~2017~~often request additional testing or information. ANotwithstanding ~~list~~the submission of ~~our~~any ~~U.S.~~requested ~~and~~additional ~~foreign patents~~information, the FDA ultimately may decide that the marketing application does not satisfy the regulatory criteria for approval and ~~published~~refuse ~~patent~~to ~~applications~~approve ~~are~~the asapplication ~~follows:~~by issuing a “not approvable” letter or a “complete response” letter requiring additional steps to be completed before approval.

Patent No.	Title and Inventor(s)	Filing Date/Issue Date	Expiration Date
5,541,105	METHOD OF CULTURING LEUKOCYTES by Georgiann B. Melink	Apr. 26, 1994/Jul. 30, 1996	July 30, 2013
6,001,585	MICRO HOLLOW FIBER BIOREACTOR by Michael J. Gramer	Nov. 14, 1997/Dec 14, 1999	Nov. 14, 2017

Biologics (such as BiovaxID) differ from other drugs for human use in that they must include more detailed chemistry and manufacturing information. This is necessary to help ensure the purity and quality of the product, for example to help ensure that it is not contaminated by an undesired microorganism or by another contaminant. The sponsoring company’s manufacturing facility must also supply product specific facility information that outlines the method of manufacture of the biologic in significant detail, since slight variations can result in a different final product. Further, an inspection of the manufacturing facility is completed to assess the production process and facility since these aspects also have a significant impact on the safety and efficacy of the product.

Foreign Patent No.	Title and Inventor(s)	Filing Date/Issue Date		ExpirationDate
EP 2027247 (UK)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.		Nov. 20, 2008/Jan. 26, 2011		May 21, 2027
DE602007012238D (Germany)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.		Nov. 20, 2008/Jan. 26, 2011		May 21, 2027
AT2027247 (Austria)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.		Nov. 20, 2008/Jan. 26, 2011		May 21, 2027
P2027247 (Switzerland)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.		Nov. 20, 2008/Jan. 26, 2011		May 21, 2027
FR2027247 (France)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.		Nov. 20, 2008/Jan. 26, 2011		May 21, 2027
GB2027247 (Great Britain)	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.		May 21, 2007/Jan. 26, 2011		May 21, 2027

Post-Approval Phase

24If the FDA approves the NDA or BLA, as applicable, the pharmaceutical product becomes available for physicians to prescribe in the U.S. After approval, the product is still subject to continuing regulation by FDA, including record keeping requirements, submitting periodic reports to the FDA, reporting of any adverse experiences with the product, and complying with drug sampling and distribution requirements. In addition, the sponsor is required to maintain and provide updated safety and efficacy information to the FDA. The sponsor is also required to comply with requirements concerning advertising and promotional labeling. In that regard, advertising and promotional materials must be truthful and not misleading. The sponsor is also prohibited from promoting any non-FDA approved or “off-label” indications of products. Failure to comply with those requirements could result in significant enforcement action by the FDA, including warning letters, orders to pull the promotional materials, and substantial fines. Also, quality control and manufacturing procedures must continue to conform to cGMP after approval.

~~Table of Contents~~29

Application Publication No.	Title and Inventor(s)	Filing Date/Publication Date	Countries/Regions
US 2009/0215022	EXTRA-CAPILLARY FLUID CYCLING SYSTEM AND METHOD FOR A CELL CULTURE DEVICE by Darrell P. Page et al.	Nov. 20, 2008/Aug. 27, 2009	United States
US 2009/0269841	METHOD AND SYSTEM FOR THE PRODUCTION OF CELLS AND CELL PRODUCTS AND APPLICATIONS THEREOF by Robert J. Wojciechowski et al.	Nov. 20, 2008/Oct. 29, 2009	United States
EP 2029722	METHOD AND SYSTEM FOR THE PRODUCTION OF CELLS AND CELL PRODUCTS AND APPLICATIONS THEREOF by Robert J. Wojciechowski et al.	May 21, 2007/Mar. 4, 2009	Europe
EP240991	METHOD AND SYSTEM FOR THE PRODUCTION OF CELLS AND CELL PRODUCTS AND APPLICATIONS THEREOF by Robert J. Wojciechowski et al.	May 21, 2007/Dec. 6, 2007	Europe
US 2012/0114634	METHODS FOR INDUCING A SUSTAINED IMMUNE RESPONSE AGAINST A B-CELL IDIOTYPE USING AUTOLOGOUS ANTI-IDIOTYPIC VACCINES THEREOF by Angelos M. Stergiou et al.	Nov. 21, 2011/May 10, 2012	United States
CA 2,739,918	METHODS FOR INDUCING A SUSTAINED IMMUNE RESPONSE AGAINST A B-CELL IDIOTYPE USING AUTOLOGOUS ANTI-IDIOTYPIC VACCINES THEREOF by Angelos M. Stergiou et al.	Oct. 7, 2009/Apr. 15, 2010	Canada
EP 2344184	METHODS FOR INDUCING A SUSTAINED IMMUNE RESPONSE AGAINST A B-CELL IDIOTYPE USING AUTOLOGOUS ANTI-IDIOTYPIC VACCINES THEREOF by Angelos M. Stergiou et al.	Oct. 7, 2009/Jul. 20, 2011	Europe
JP 2012-505229	METHODS FOR INDUCING A SUSTAINED IMMUNE RESPONSE AGAINST A B-CELL IDIOTYPE USING AUTOLOGOUS ANTI-IDIOTYPIC VACCINES THEREOF by Angelos M. Stergiou et al.	Oct. 7, 2009/Mar. 1, 2012	Japan
US 2011/0212493	PERFUSION BIOREACTORS, CELL CULTURE SYSTEMS, AND METHODS FOR PRODUCTION OF CELLS AND CELL-DERIVED PRODUCTS by Mark Hirschel et al.	Apr. 22, 2011/Sept. 1, 2011	United States
AU 2009308354	PERFUSION BIOREACTORS, CELL CULTURE SYSTEMS, AND METHODS FOR PRODUCTION OF CELLS AND CELL-DERIVED PRODUCTS by Mark Hirschel et al.	Oct. 22, 2009/Apr. 29, 2009	Australia
CA 2,741,481	PERFUSION BIOREACTORS, CELL CULTURE SYSTEMS, AND METHODS FOR PRODUCTION OF CELLS AND CELL-DERIVED PRODUCTS by Mark Hirschel et al.	Oct. 22, 2009/Apr. 29, 2009	Canada
EP 2346984	PERFUSION BIOREACTORS, CELL CULTURE SYSTEMS, AND METHODS FOR PRODUCTION OF CELLS AND CELL-DERIVED PRODUCTS by Mark Hirschel et al.	Oct. 22, 2009/Jul. 27, 2011	Europe

Drug and biologics manufacturers and their subcontractors are required to register their facilities and products manufactured annually with FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA to assess compliance with cGMP regulations. Facilities may also be subject to inspections by other federal, foreign, state, or local agencies. In addition, approved biological drug products may be subject to lot-by-lot release testing by the FDA before these products can be commercially distributed. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance.

25In addition, following FDA approval of a product, discovery of problems with a product or the failure to comply with requirements may result in restrictions on a product, manufacturer, or holder of an approved marketing application, including withdrawal or recall of the product from the market or other voluntary or FDA-initiated action that could delay further marketing. Newly discovered or developed safety or effectiveness data may require changes to a product’s approved labeling, including the addition of new warnings and contraindications. Also, the FDA may require post-market testing and surveillance to monitor the product’s safety or efficacy, including additional clinical studies, known as Phase 4 clinical trials, to evaluate long-term effects.

~~Table~~Orphan ofDrug ~~Contents~~Designation and Exclusivity

Application Publication No.	Title and Inventor(s)	Filing Date/Publication Date	Countries/Regions
IL 212387	PERFUSION BIOREACTORS, CELL CULTURE SYSTEMS, AND METHODS FOR PRODUCTION OF CELLS AND CELL-DERIVED PRODUCTS by Mark Hirschel et al.	Oct. 22, 2009/Apr. 29, 2009	Israel
JP 2012-506257	PERFUSION BIOREACTORS, CELL CULTURE SYSTEMS, AND METHODS FOR PRODUCTION OF CELLS AND CELL-DERIVED PRODUCTS by Mark Hirschel et al.	Oct. 22, 2009/Mar. 15, 2012	Japan
WO 2012/021840	MATERIALS AND METHODS FOR DESIGNING AUTOLOGOUS IDIOTYPE VACCINES AND TREATMENT OF B-CELL MALIGNANCIES by Carlos Santos et al.	Aug. 12, 2011/Feb. 16, 2012	International
WO 2012/064760	MATERIALS AND METHODS FOR DIRECTING AN IMMUNE RESPONSE AGAINST AN EPITOPE by Carlos Santos et al.	Nov. 9, 2011/May 18, 2012	International

Pursuant to the U.S. Orphan Drug Act, a sponsor may request that the FDA designate a drug intended to treat a "rare disease or condition" as an "orphan drug." The term "orphan drug" can refer to either a drug or biologic. A rare disease or condition is defined as one which affects less than 200,000 people in the U.S., or which affects more than 200,000 people, but for which the cost of developing and making available the product is not expected to be recovered from sales of the product in the U.S. In the U.S., Orphan Drug designation must be requested before submitting a NDA or BLA. Upon the approval of the first NDA or BLA for a drug designated as an orphan drug for a specified indication, the sponsor of that NDA or BLA is entitled to seven years of exclusive marketing rights in the U.S. for the orphan drug for the same indication unless the sponsor cannot assure the availability of sufficient quantities of the drug to meet the needs of persons with the disease. However, orphan drug status is particular to the approved indication and does not prevent another company from seeking approval of an off-patent drug that has other labeled indications that are not under orphan or other exclusivities. The period of orphan exclusivity is concurrent with any patent or other exclusivity that relates to the drug or biologic. Orphan drugs may also be eligible for federal income tax credits for costs associated with the drugs' development. In order to increase the development and marketing of drugs for rare disorders, regulatory agencies outside the U.S., such as the EU (which has a ten year exclusivity marketing period) have enacted regulations similar to the Orphan Drug Act.

WeOrphan ~~have~~Drug ~~filed~~designation ~~PCT~~does ~~applications~~not ~~based~~convey onany oradvantage ~~related~~in, toor ~~various~~shorten ~~aspects~~the duration of, ~~our~~the ~~analyses~~regulatory ofreview ~~clinical benefit~~and ~~based~~approval onprocess. ~~isotype,~~If ~~and~~a toproduct ~~sequencing~~which ~~results~~has ~~matching~~an ~~vaccine~~Orphan toDrug ~~antigen~~designation ~~coverage~~subsequently ~~for~~receives the ~~development~~first ofFDA aapproval ~~companion~~for ~~diagnostic~~the ~~and~~indication tofor ~~use~~which ofit has such designation, the ~~AutovaxID®~~product ~~instrument~~is ~~for~~entitled ~~the~~to ~~production~~a ofmarketing ~~viruses~~exclusivity. For seven years, ~~virus-like~~the ~~particles~~FDA may not approve any other application, ~~and~~including ~~antiviral~~NDAs ~~vaccines~~or ~~such~~BLAs, asto ~~those~~market ~~targeting~~the ~~influenza~~“same ~~and~~drug” ~~other~~for ~~contagious~~the ~~diseases~~same indication. InThe ~~addition~~only ~~to its~~exceptions ~~independent~~are ~~research~~(i) ~~and~~where ~~development~~the ~~programs,~~second itproduct is ~~anticipated~~shown ~~that~~to ~~our~~be ~~collaborations~~“clinically superior” to the product with ~~industry~~Orphan ~~and~~Drug ~~research~~exclusivity, ~~partners~~as ~~will~~that ~~generate~~phrase ~~additional~~is ~~valuable~~defined ~~intellectual~~by ~~property,~~the ~~which~~FDA ~~will~~and be(ii) ~~wholly-owned,~~if ~~jointly~~there ~~owned~~is ~~and/or~~an ~~licensed~~inadequate ~~to us~~supply.

We also possess licensed intellectual property used in the development and manufacture of BiovaxID™. BiovaxID is manufactured with a proprietary cell line, which we have licensed on a world-wide exclusive basis from Stanford. This is significant, because we believe that the use of any cell line other than our exclusively licensed cell line, in the production of a similar idiotype vaccine, would require filing a separate IND application and undergoing clinical testing evaluation by the FDA. Manufacturing

~~Additionally,~~Among wethe ~~consider~~conditions ~~trademarks~~for toregulatory/marketing beapproval ~~important~~the toregulatory ~~our~~agency, ~~business.~~such Weas ~~have~~the ~~established~~FDA, ~~trademarks~~the ~~covering~~EMA ~~various~~and ~~aspects~~Health ofCanada, ~~our~~requires ~~hollow~~that ~~fiber~~the ~~perfusion~~prospective ~~process,~~manufacturer's ~~instruments~~quality control and ~~proprietary~~manufacturing ~~cell culturing~~procedures ~~methods~~continually conform to cGMP regulations (~~AutovaxID®,~~which ~~Mini~~are ~~Max®~~regulations governing the manufacture, ~~Xcellerator®~~processing, ~~Acusyst-Maximizer®~~ packing, storage and ~~Acusyst-Xcell®~~testing of drugs and biologics intended for human use). WeIn ~~have~~complying ~~applied~~with ~~for~~cGMP, manufacturers must devote extensive time, money and effort in the Uarea of production and quality control and quality assurance to maintain full technical compliance.S. Manufacturing facilities and ~~foreign~~company ~~registration~~records ofare subject to periodic inspections by the ~~trademarks~~regulatory ~~BiovaxID™~~agency ~~and~~to ~~Biovax™~~ensure compliance. If a manufacturing facility is not in ~~connection~~substantial compliance with ~~its~~these ~~therapeutic~~requirements, ~~cancer vaccine~~regulatory enforcement action may be taken by the regulatory agency, which may include seeking an injunction against shipment of products from the facility and ~~Autovax™~~recall inof ~~connection~~products ~~with~~previously ~~its~~shipped ~~instrument~~from ~~used~~the infacility. Changes to the ~~manufacture~~manufacturing process or site during or following the completion of ~~BiovaxID~~clinical trials requires sponsors to demonstrate to the regulatory agency that the product under new conditions is comparable to the product that was the subject of earlier clinical testing. WeThis ~~plan~~requirement applies to ~~continue~~relocations ~~aggressively~~or ~~pursuing~~expansions ~~trademark~~of ~~and~~manufacturing ~~other~~facilities, ~~proprietary~~or ~~protection~~additional ~~for~~facilities ~~our~~that ~~therapeutic~~may ~~vaccine~~be ~~technology~~required upon successful commercialization of the product. A showing of comparability requires data demonstrating that the product continues to be safe, pure, and ~~instrumentation~~potent and may be based on chemical, ~~both~~ ~~nationally~~physical, and ~~internationally.~~biological assays and, in some cases, other non-clinical data.

Our ability to maintain and solidify our proprietary position for our technology will depend on our success in obtaining effective claims and enforcing those claims once granted. We do not know whether any of our patent applications or those patent applications that we license will result in the issuance of any patents. Our issued patents and those that may issue in the future, or those licensed to us, may be challenged, invalidated, or circumvented, which could limit our ability to stop competitors from marketing related products or the length of term of patent protection that we may have for our product candidates. In addition, the rights granted under any issued patents may not provide us with proprietary protection or competitive advantages against competitors with similar technology. Furthermore, our competitors may independently develop similar technologies or duplicate any technology developed by us. Because of the extensive time required for development, testing and regulatory review of a potential product, it is possible that, before any of our product candidates can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of the patent. 30

WeMedical ~~rely~~Device in some circumstances on trade secrets to protect our technology, particularly with respect to certain aspects of our BiovaxID manufacturing process. However, trade secrets are difficult to protect. We seek to protect our proprietary technology and processes, in part, by confidentiality agreements with our employees, consultants, scientific advisors, and other contractors. These agreements may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our employees, consultants, or contractors use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. Regulation

26New medical devices are also subject to FDA approval and extensive regulation under the FDCA. Under the FDCA, medical devices are classified into one of three classes: Class I, Class II, or Class III. The classification of a device into one of these three classes generally depends on the degree of risk associated with the medical device and the extent of control needed to ensure safety and effectiveness.

~~Table~~Class I devices are those for which safety and effectiveness can be assured by adherence to a set of ~~Contents~~general controls. These general controls include compliance with the applicable portions of the FDA’s Quality System Regulation (“QSR”), which sets forth good manufacturing practice requirements; facility registration and product reporting of adverse medical events listing; truthful and non-misleading labeling; and promotion of the device only for its cleared or approved intended uses. Class II devices are also subject to these general controls, and any other special controls as deemed necessary by the FDA to ensure the safety and effectiveness of the device. Review and clearance by the FDA for these devices is typically accomplished through the so-called 510(k) pre-market notification procedure. A Class III device requires approval of a premarket application (“PMA”), an expensive, lengthy and uncertain process requiring many years to complete.

~~GOVERNMENT~~When ~~REGULATION~~510(k) clearance is sought, a sponsor must submit a pre-market notification demonstrating that the proposed device is substantially equivalent to a previously approved device. If the FDA agrees that the proposed device is substantially equivalent to the predicate device, then 510(k) clearance to market will be granted. After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, requires a new 510(k) clearance or could require pre-market approval. Our instruments and disposables used for the production of cell cultures are generally regulated as Class I devices exempt from the 510(k) clearance process.

~~Government~~Clinical ~~authorities~~trials inare ~~the~~almost ~~U.S.~~always atrequired ~~the~~to ~~federal~~support ~~and~~a ~~state~~PMA ~~local levels~~ and inare ~~foreign~~sometimes ~~countries~~required ~~extensively~~for ~~regulate,~~a ~~among~~510(k) ~~other~~pre-market things, the research, development, testing, manufacture, labeling, promotion, advertising, distribution, sampling, marketing, and import and export of pharmaceutical products, biologics, and medical devicesnotification. ~~All~~These of our product candidates in development will require regulatory and/or marketing approval by government agencies prior to commercialization. In particular, human therapeutic products are subject to rigorous preclinical and clinical trials ~~and~~generally other approval procedures of the FDA and similar regulatory authorities in foreign countries. Various federal, state, local, and foreign statutes and regulations also govern testing, manufacturing, safety, labeling, storage, and record-keeping related to such products and their marketing. The process of obtaining these approvals and the subsequent process of maintaining substantial compliance with appropriate federal, state, local, and foreign statutes and regulations require ~~the~~submission ~~expenditure~~ of ~~substantial~~an ~~time~~application ~~and~~for ~~financial~~an ~~resources.~~investigational ~~The~~device ~~FDA~~exemption ~~regulates drugs and well-characterized biologics under the Federal Food, Drug, and Cosmetic Act~~ (“~~FDCA~~IDE”),. ~~and~~An ~~implementing~~IDE ~~regulations~~must ~~that~~be ~~are~~supported ~~adopted~~by ~~under~~pre-clinical ~~the FDCA. In the case of biologics~~data, ~~the FDA regulates~~ such ~~products~~as ~~under~~animal ~~the Public Health Service Act. If we fail to comply with the applicable requirements under these laws~~ and ~~regulations~~laboratory attesting ~~any time during the product development process~~results, ~~approval~~which ~~process,~~show orthat ~~after~~the ~~approval,~~device weis ~~may~~safe ~~become subject~~ to ~~administrative~~test orin ~~judicial~~humans ~~sanctions.~~and ~~These~~that ~~sanctions could include~~ the ~~FDA’s~~ ~~refusal~~study toprotocols ~~approve~~are ~~pending~~scientifically applications, withdrawals of approvals, clinical holds, warning letters, product recalls, product seizures, total or partial suspension of its operations, injunctions, fines, civil penalties or criminal prosecutionsound. ~~Any agency enforcement action could have a material adverse effect on us.~~ The ~~FDA~~IDE ~~also~~must ~~administers~~be ~~certain~~approved ~~controls~~in ~~over~~advance ~~the~~by ~~export of drugs and biologics from~~ the ~~U.S.~~FDA ~~Any~~for ~~failure~~a byspecified ~~us,~~number ~~our suppliers~~ of ~~manufactured drug product~~patients, ~~collaborators~~ orunless ~~licensees to obtain or maintain, or any delay in obtaining, regulatory approvals could adversely affect~~ the ~~marketing of our~~ product ~~candidates~~is ~~and~~deemed ~~our~~a ~~ability~~non-significant torisk ~~receive~~device ~~product revenue, license revenue or profit sharing payments. In addition, statutes, rules, regulations,~~ and ~~policies~~is ~~may~~eligible ~~change~~for ~~and~~more ~~new~~abbreviated ~~legislation~~IDE ~~or regulations may be issued that could delay such approvals~~requirements.

~~The~~Both ~~FDA~~before ~~has~~and ~~extensive~~after ~~regulatory~~a ~~authority~~medical ~~over~~device ~~biopharmaceutical~~is ~~products~~commercially ~~(drugs~~distributed, manufacturers and ~~diagnostic~~marketers ~~products~~of ~~produced~~the ~~from~~device ~~biologic~~have ~~processes).~~ongoing ~~The~~responsibilities ~~principal~~under FDA regulations. ~~that~~The ~~pertain~~FDA toreviews ~~our~~design ~~cell production~~and ~~activity~~manufacturing ~~include~~practices, ~~but~~labeling ~~are not limited to 21CFR Parts 600~~ and ~~610~~record –keeping, ~~General Biological Products~~ and ~~Standards;~~manufacturers’ 21required ~~CFR~~reports ~~Parts~~of ~~210~~adverse experiences and ~~211~~other –information ~~current~~to ~~Good~~identify ~~Manufacturing~~potential ~~Practices~~problems ~~for~~with ~~Finished~~marketed ~~Pharmaceuticals; 21 CFR Part 820 – Quality System Regulations (~~medical devices~~); and 21 CFR Part 58 – Good Laboratory Practice for Non-Clinical Laboratory Studies~~. ~~FDA’s~~Device ~~guidelines~~manufacturers ~~include~~are ~~controls~~subject ~~over~~to ~~procedures~~periodic and ~~systems~~unannounced ~~related~~inspection toby the ~~production~~ ofFDA ~~mammalian proteins and quality control testing of any new biological drug or product intended~~ for ~~use~~compliance inwith ~~humans~~the ~~(including~~QSR, tocGMP arequirements ~~somewhat lesser degree, in vivo biodiagnostic products). FDA guidelines are intended to assure~~ that ~~the biological~~govern ~~drug or product meets~~ the ~~requirements~~methods ~~through~~used ~~rigorous testing with respect to safety~~in, ~~efficacy,~~ and ~~meet~~ the ~~purity~~facilities ~~characteristics for identity~~ and ~~strength.~~controls ~~FDA~~used ~~approvals~~ for, the ~~use~~design, ofmanufacture, ~~new~~packaging, ~~biological~~servicing, ~~drugs~~labeling, orstorage, ~~products~~installation, ~~(that can never be assured) require several rounds of extensive preclinical testing~~ and ~~clinical~~distribution ~~investigations conducted by the sponsoring pharmaceutical company prior to sale and use~~ of ~~the~~all ~~product.~~finished Atmedical ~~each~~devices ~~stage,~~intended ~~the approvals granted by the FDA include the manufacturing process utilized to produce the product. Accordingly, our cell culture systems used~~ for ~~the~~human production of therapeutic or biotherapeutic products (biological drug or product) are subject to significant regulation by the FDA under the Federal Food, Drug and Cosmetic Act, as amended (the “FD&C Act”)use.

~~Our~~If ~~cell~~the ~~culture~~FDA ~~systems~~finds ~~used~~that toa ~~produce~~manufacturer ~~cells~~has ~~for~~failed ~~diagnostic uses~~to ~~are~~comply ~~regulated~~or ~~under~~that ~~the~~a ~~FD&C~~medical ~~Act~~device asis ~~Class~~ineffective Ior ~~medical~~poses ~~devices.~~an ~~Medical~~unreasonable ~~devices~~health ~~are~~risk, ~~classified~~it bycan ~~the~~institute ~~FDA~~or ~~into~~seek ~~three~~a ~~classes~~wide ~~(Class~~variety I,of ~~Class~~enforcement IIactions and ~~Class~~remedies, ~~III)~~ranging ~~based~~from ~~upon~~a ~~the~~public ~~potential~~warning ~~risk~~letter to ~~the~~more ~~consumer~~severe ~~posed~~actions bysuch ~~the~~as: ~~medical~~fines, ~~device~~injunctions, ~~(Class~~and ~~I medical~~civil ~~devices~~penalties; ~~pose~~recall ~~the~~or ~~least~~seizure ~~amount~~ of ~~risk,~~products; ~~while~~operating ~~Class~~restrictions, ~~III~~partial ~~medical~~suspension ~~devices~~or ~~and~~total ~~“new”~~shutdown ~~devices~~of ~~are~~production; ~~presumed~~refusing torequests ~~inherently~~for ~~pose the greatest amount of risk~~510(k). Asclearance ~~Class~~or IPMA ~~medical~~approval ~~devices, our systems must be manufactured in accordance with cGMP guidelines. Sales~~ of ~~such~~new ~~systems~~products; towithdrawing ~~customers~~510(k) ~~using~~clearance ~~them~~or toPMA ~~manufacture~~approvals ~~materials~~already ~~for~~granted; ~~clinical studies~~ and ~~licensure~~criminal ~~do not require prior FDA approval~~prosecution.

The ~~process of complying with~~ FDA ~~guidelines~~also ~~and~~has ~~obtaining approvals from~~ the ~~FDA~~authority ~~of applications~~ to ~~market~~require ~~biopharmaceutical drugs and products is costly~~repair, ~~time~~replacement ~~consuming~~or ~~and~~refund ~~subject~~of to unanticipated delays. There is no assurance that our customers will be able to obtain FDA approval for biological drugs and products produced with our systems, and failure to receive such approvals may adversely affect the ~~demand~~cost ~~for~~of ~~our~~any ~~services.~~medical device.

~~Under~~The ~~the~~FDA ~~FD&C~~also ~~Act,~~administers ~~our~~certain ~~customers~~controls ~~must~~over ~~establish~~the ~~and~~export ~~validate~~of ~~standard~~medical ~~operating~~devices ~~procedures~~from ~~(“SOPs”)~~the ~~utilizing our cell culture technologies in their drug master files~~U.S., Weas ~~provide~~international ~~assistance~~sales inof ~~operational,~~medical ~~validation,~~devices ~~calibration~~that ~~and~~have ~~preventive~~not ~~maintenance~~received ~~SOPs~~FDA toapproval ~~customers,~~are assubject ~~needed,~~ to ~~support~~FDA ~~their~~export ~~product development and commercialization processes~~requirements. ~~For example~~Additionally, ~~we will~~each ~~typically~~foreign ~~provide~~country ~~existing~~subjects ~~and~~such ~~prospective~~medical ~~customers~~devices ~~who are utilizing our contract production services or constructing production facilities based on our cell culture technologies with information~~ to ~~enable~~its ~~such~~own ~~customers~~regulatory torequirements. ~~comply~~In ~~with~~ the ~~FDA’s~~ ~~guidelines~~EU, ~~required for facility layout and design. This information may be provided either in~~ a ~~drug/biologic~~single ~~master~~regulatory ~~file~~approval ~~that~~process wehas ~~give~~been ~~permission~~created, toand ~~customers~~approval tois ~~cross~~represented ~~reference~~by ~~in their submission to~~ the ~~FDA,~~“CE” ~~or provided to customers to include in their FDA submissions~~Mark.

27 31

~~Table~~Other ofRegulation ~~Contents~~in the United States

AsThe wePatient ~~currently~~Protection doand ~~business~~Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (2010) (collectively, the “PPACA”). Enacted in aMarch ~~significant~~2010, ~~number~~the PPACA, makes changes that could significantly impact the development and commercialization and of ~~countries~~our product candidates. Significant measures contained in the PPACA include, for example, coordination and promotion of research on comparative clinical effectiveness of different technologies and procedures, initiatives to revise Medicare payment methodologies, such as bundling of payments across the continuum of care by providers and physicians, and initiatives to promote quality indicators in payment methodologies. The PPACA also includes significant new fraud and abuse measures, including required disclosures of financial arrangements with physician customers, lower thresholds for violations and increasing potential penalties for such violations. In addition, the PPACA establishes an Independent Payment Advisory Board (“IPAB”), to reduce the ~~requirements~~per capita rate of ~~the FDA~~growth in Medicare spending. The IPAB has broad discretion to propose policies to reduce expenditures, wewhich ~~are~~may ~~subject~~have a negative impact on payment rates for services or therapeutics, including therapeutics like BiovaxID. In addition to the ~~regulations~~PPACA, the effect of ~~other~~which ~~countries~~cannot presently be fully quantified given its relatively recent enactment, various healthcare reform proposals have also emerged from federal and ~~their~~state ~~governmental~~governments. ~~agencies~~Changes in healthcare policy could substantially impact the development and commercialization of BiovaxID. We cannot predict whether future healthcare initiatives will be implemented at the federal or state level or in countries outside of the U.S. in which ~~apply~~we tomay ~~our~~do ~~goods~~business, or the effect any future legislation or regulation will have on us. The taxes imposed by the new federal legislation and ~~services~~the ~~when~~expansion ~~sold~~in government's role in ~~their~~the ~~jurisdiction~~U.S. healthcare industry may result in decreased profits to us, lower reimbursements by payers for our product candidates or reduced medical procedure volumes, all of which may adversely affect our business, financial condition and results of operations, possibly materially.

WeThe ~~are~~Biologics ~~subject~~Price toCompetition ~~various~~and ~~regulations~~Innovation ~~regarding~~Act ~~handling~~(2010). The Biologics Price Competition and ~~disposal~~Innovation ofAct, establishes an abbreviated approval pathway for “biosimilar” biological products. Among the provisions potentially ~~hazardous~~applicable ~~materials,~~to ~~wastes~~our ~~and~~product ~~chemicals~~candidates are (1) innovator manufacturers of reference biological products (such as ~~cells~~BiovaxID) ~~and~~are ~~their~~granted ~~secreted~~12 ~~waste~~years ~~products,~~of ~~including~~exclusive ~~those~~use ~~enforced~~before by biosimilars can be approved for marketing in the U.S. ~~Environmental~~and ~~Protection Agency~~ (~~“EPA”~~2) an ~~and~~application ~~various~~for ~~state~~a ~~and~~biosimilar ~~local~~product ~~agencies~~may not be submitted to the FDA until 4 years after the date on which the BLA for the reference product was first approved. FDA is still early in the process of developing regulations to implement the provisions of this legislation.

~~Pharmaceutical~~Toxic ~~Product~~Substances ~~Regulation~~ Control Act. The EPA has promulgated regulations under Section 5 of the Toxic Substances Control Act (“TSCA”), which require notification procedures for review of certain so-called intergeneric microorganisms before they are introduced into commerce. Intergeneric microorganisms are those formed by deliberate combinations of genetic material from organisms classified in different taxonomic genera, which are types of animal or plant groups. The regulations provide exemptions from the reporting requirements for new microorganisms used for research and development when the researcher or institution is in mandatory compliance with the National Institutes of Health Guidelines for Research Involving Recombinant DNA Molecules (“NIH Guidelines”). Those researchers voluntarily following the NIH Guidelines can, by documenting their use of the NIH Guidelines, satisfy EPA’s requirements for testing in contained structures. The EPA may enforce the TSCA through enforcement actions such as seizing noncompliant substances, seeking injunctive relief, and assessing civil or criminal penalties. We believe that our research and development activities involving intergeneric microorganisms comply with the TSCA, but there can be no assurance that restrictions, fines or penalties will not be imposed on us in the future.

~~Regulation~~Health byCare ~~governmental~~Coverage ~~authorities~~and inReimbursement. ~~the~~Commercial ~~U.S.~~success ~~and~~in ~~other~~marketing ~~countries~~and isselling aour ~~significant~~product ~~factor~~candidates depends, in ~~the~~part, ~~manufacture~~on ~~and~~the ~~marketing~~availability of ~~pharmaceuticals~~ adequate coverage and inreimbursement ~~our~~from ~~ongoing~~third-party ~~research~~health care payers, such as government and ~~development~~private ~~activities.~~health ~~Most,~~insurers ifand ~~not~~managed ~~all,~~care oforganizations. ~~our~~Third-party ~~product~~payers ~~candidates~~are ~~require~~increasingly ~~regulatory~~challenging ~~approval~~the bypricing ~~governmental~~of ~~agencies~~medical ~~prior~~products toand ~~commercialization~~services. InGovernment and private sector initiatives to limit the ~~case~~growth of ~~biologics~~health care costs, ~~they~~including ~~are~~price ~~subject~~regulation, ~~to rigorous~~competitive ~~preclinical~~pricing, ~~testing~~coverage and ~~clinical~~payment ~~trials~~policies, and ~~other pre~~managed-~~marketing~~care ~~approval~~arrangements, ~~requirements~~are bycontinuing ~~the~~in ~~FDA~~many ~~and~~countries ~~foreign~~where ~~regulatory~~we ~~authorities~~do business, including the U.S. These changes are causing the marketplace to put increased emphasis on the delivery of more cost-effective medical products.

~~Each~~Government programs, including Medicare and Medicaid, private health care insurance and managed-care plans have attempted to control costs by limiting the amount of ~~these~~reimbursement ~~three~~they ~~phases~~will ispay ~~discussed~~for ~~further~~particular ~~below~~procedures or treatments. This has created an increasing level of price sensitivity among customers for our product candidates. Examples of how limits on drug coverage and reimbursement in the U.S. may cause drug price sensitivity include the growth of managed care, changing Medicare reimbursement methodologies, and drug rebates and price controls. Some third-party payers must also approve coverage for new or innovative devices or therapies before they will reimburse health care providers who use the medical devices or therapies. Even though a new medical product may have been cleared for commercial distribution, we may find limited demand for the product until reimbursement approval has been obtained from governmental and private third-party payers.

~~Preclinical Phase~~ 32

~~The~~Anti-Kickback ~~activities~~Laws. ~~required~~In ~~before a product may be marketed in~~ the U.S., ~~and~~there ~~other~~are ~~countries~~federal ~~begin~~and ~~with~~state ~~preclinical~~anti-kickback ~~testing~~laws ~~not~~that ~~involving~~prohibit ~~human~~the ~~subjects.~~payment ~~The~~or ~~development~~receipt of akickbacks, ~~new~~bribes ~~pharmaceutical~~or ~~agent~~other ~~begins~~remuneration ~~with~~to induce the ~~discovery~~purchase, order or ~~synthesis~~recommendation of ahealth ~~new~~care ~~molecule~~products orand ~~well-characterized biologic~~services. These ~~agents~~laws ~~are~~constrain ~~screened for~~the ~~pharmacological~~sales, ~~activity~~marketing ~~using~~and ~~various~~other ~~animal~~promotional ~~and~~activities ~~tissue~~of ~~models~~pharmaceutical companies, ~~with~~such as us, by limiting the ~~goal~~kinds of ~~selecting~~financial aarrangements ~~lead~~we ~~agent~~may ~~for~~have ~~further~~with ~~development.~~prescribers, ~~Additional~~purchasers, ~~studies~~dispensers ~~are~~and ~~conducted~~users toof ~~confirm~~drugs ~~pharmacological~~and ~~activity,~~biologics. toThe ~~generate~~U.S. ~~safety~~Department ~~data,~~of Health and toHuman ~~evaluate prototype~~Services ~~dosage~~(“HHS”) ~~forms~~Office ~~for~~of ~~appropriate~~Inspector ~~release~~General ~~and~~(“OIG”) ~~activity~~has ~~characteristics.~~issued ~~Once~~“Compliance ~~the~~Guidance” ~~pharmaceutically~~for ~~active~~pharmaceutical ~~molecule~~manufacturers iswhich, ~~fully~~among ~~characterized~~other things, anidentifies ~~initial~~manufacturer ~~purity~~practices ~~profile~~implicating of the ~~agent~~federal isanti-kickback ~~established.~~law ~~During~~(42 ~~this~~U.S.C. §1320a-7b(b)) and ~~subsequent~~describes ~~stages~~elements of ~~development, the~~an ~~agent~~effective iscompliance ~~analyzed~~program. toThe ~~confirm~~OIG ~~the~~Compliance ~~integrity~~Guidance is voluntary, and ~~quality~~we ofhave ~~material~~not ~~produced.~~adopted Ina ~~addition,~~formal ~~development~~compliance ~~and~~program ~~optimization~~modeled ofafter the ~~initial~~one ~~dosage~~described ~~forms~~in tothe beOIG ~~used~~Compliance inGuidance. ~~clinical~~Although ~~trials~~none ~~are~~of ~~completed,~~our ~~together~~practices ~~with~~have ~~analytical~~been ~~models~~subject to ~~determine~~challenge ~~product stability~~under ~~and~~any ~~degradation.~~anti-kickback Alaws, ~~bulk~~due ~~supply~~to of the ~~active~~breadth ~~ingredient~~of ~~to support~~ the ~~necessary~~statutory ~~dosing~~provisions inof ~~initial~~some ~~clinical~~of ~~trials~~these ~~must~~laws, beit ~~secured.~~is ~~Upon~~possible ~~successful~~that ~~completion~~some of ~~preclinical~~our ~~safety~~practices ~~and~~might ~~efficacy~~be ~~studies~~challenged inunder ~~animals,~~one anor ~~IND~~more ~~submission~~of ~~is prepared~~these ~~and~~laws ~~provided~~in to the ~~FDA~~future. ~~for~~Violations ~~review prior to commencement~~ of ~~human~~these ~~clinical~~laws ~~trials.~~can ~~The~~lead ~~IND~~to ~~consists~~civil ofand ~~the~~criminal ~~initial chemistry~~penalties, ~~analytical,~~including ~~formulation~~imprisonment, fines and ~~animal~~exclusion ~~testing~~from ~~data~~participation ~~generated~~in ~~during~~federal ~~the~~health ~~preclinical~~care ~~phase~~programs. InAny ~~general,~~such ~~the~~violations ~~review period~~could ~~for~~have ana ~~IND~~material ~~submission~~adverse iseffect ~~30 days,~~on ~~after~~our ~~which~~business, iffinancial ~~no comments are made by the FDA~~condition, ~~the~~results ~~product~~of ~~candidate~~operations ~~can~~or becash ~~studied in Phase 1 clinical trials~~flows.

~~Clinical~~Health ~~Phase~~Information Privacy and Security. Individually identifiable health information is subject to an array of federal and state regulation. Federal rules promulgated pursuant to the Health Information Portability and Accountability Act of 1996 (“HIPAA”) regulate the use and disclosure of health information by “covered entities” (which includes individual and institutional providers from which we may receive individually identifiable health information). These regulations govern, among other things, the use and disclosure of health information for research purposes, and require the covered entity to obtain the written authorization of the individual before using or disclosing health information for research. Failure of the covered entity to obtain such authorization (absent obtaining a waiver of the authorization requirement from an Institutional Review Board) could subject the covered entity to civil and criminal penalties. As the implementation of this regulation is still in its early phases, we may experience delays and complex negotiations as we deal with each entity’s differing interpretation of the regulations and what is required for compliance. Further, HIPAA’s criminal provisions are not limited in their applicability to “covered persons,” but apply to any “person” that knowingly and in violation of the statute obtains or discloses individually identifiable health information. Also, where its customers or contractors are covered entities, including hospitals, universities, physicians or clinics, we may be required by the HIPAA regulations to enter into “business associate” agreements that subject us to certain privacy and security requirements, including making its books and records available for audit and inspection by HHS and implementing certain health information privacy and security safeguards. In addition, many states have laws that apply to the use and disclosure of health information, and these laws could also affect the manner in which we conduct its research and other aspects of its business. Such state laws are not preempted by the federal privacy law where they afford greater privacy protection to the individual. While activities to assure compliance with health information privacy laws are a routine business practice, we are unable to predict the extent to which its resources may be diverted in the event of an investigation or enforcement action with respect to such laws.

~~Following~~Foreign successful submission of an IND, the sponsor is permitted to conduct clinical trials involving the administration of the investigational product candidate to human subjects under the supervision of qualified investigators in accordance with good clinical practice. Typically, clinical evaluation involves the following time-consuming and costly three-phase sequential process: Regulation

•Whether ~~Phase~~or 1not we obtain FDA approval for a product, we may choose to seek approval of our product candidates by the comparable regulatory authorities of foreign countries. Like ~~Phase~~in 1the U.S., before we can commence clinical trials ~~are~~or ~~conducted~~marketing of our product candidates in a ~~limited~~foreign ~~number~~country, ofwe ~~healthy~~must ~~individuals~~submit toa ~~determine~~new drug application in that country. The requirements governing the ~~drug~~conduct orof ~~biologics’~~clinical ~~safety~~trials, ~~and~~product ~~tolerability~~licensing, pricing, and ~~include~~reimbursement ~~biological~~vary ~~analyses~~greatly from country to ~~determine~~country. Although governed by the ~~availability~~applicable ~~and~~country, ~~metabolization~~clinical trials conducted outside of the ~~active~~U.S. ~~ingredient~~typically ~~following~~are ~~administration~~administered under a three-phase sequential process similar to that discussed above for pharmaceutical products. Clinical ~~The~~trials ~~total~~conducted ~~number~~in ofthe ~~subjects~~EU must comply with the EU Clinical Trial Regulations and ~~patients~~are ~~included~~monitored inand ~~Phase~~inspected 1by ~~clinical~~each EU Member State. Clinical trials ~~varies,~~conducted ~~but~~in Canada must comply with the Health Canada Regulations and are ~~generally~~approved and monitored by an independent committee of doctors, scientists, advocates and others to ensure safety and ethical standards. In addition, regulatory approval of pricing/marketing of the product candidate is required in most countries other than the ~~range~~U.S. We offace 20the risk that the pricing, which results from the regulatory approval process, would be insufficient to 80generate ~~people~~an acceptable return to us or our collaborators.

•The ~~Phase~~regulatory/marketing 2.approval ~~Phase~~process 2varies ~~clinical~~from ~~trials~~country ~~involve administering the drug~~ to ~~individuals~~country, ~~who~~and ~~suffer from~~ the ~~target~~approval ~~disease~~time ormay ~~condition~~be tolonger ~~determine the drug~~ or ~~biologics’~~shorter ~~potential~~than ~~efficacy~~that ~~and~~required ~~ideal~~for ~~dose~~FDA approval. However, ~~These~~foreign ~~clinical~~countries ~~trials~~ are ~~typically~~similar ~~well controlled, closely monitored, and conducted~~ in athat ~~relatively~~they ~~small~~generally ~~number of patients~~require, ~~usually~~as ~~involving~~part ~~no more than several hundred subjects. These clinical trials require scale up for manufacture~~ of ~~increasingly~~any ~~larger~~new ~~batches~~drug ofsubmission/application ~~bulk~~process, ~~chemical.~~sufficient ~~These~~evidence ~~batches require validation analysis~~ to ~~confirm~~support the ~~consistent~~safety, ~~composition~~efficacy and quality of the ~~drug~~product ~~or biologics~~candidate.

• Phase 3. Phase 3 clinical trials are performed after preliminary evidence suggesting effectiveness of a drug or biologics has been obtained and safety (toxicity), tolerability, and an ideal dosing regimen have been established. Phase 3 clinical trials are intended to gather additional information about the effectiveness and safety that is needed to evaluate the overall benefit-risk relationship of the drug or biologics and to complete the information needed to provide adequate instructions for the use of the drug or biologics, also referred to as the Official Product Information. Phase 3 clinical trials usually include from several hundred to several thousand subjects.33

~~Throughout~~Under ~~the~~EU ~~clinical~~regulatory ~~phase~~systems, ~~samples~~the manufacture and sale of ~~the~~new ~~product~~drugs ~~made~~are incontrolled ~~different~~by ~~batches~~the EMA. MAAs are ~~tested~~submitted under either a centralized or decentralized procedure for ~~stability~~ tomost ~~establish~~products. ~~shelf~~The ~~life~~centralized ~~constraints~~procedure, which is the pathway for BiovaxID, is available for medicines produced by biotechnology or which are highly innovative and provides single marketing authorization that is valid for all EU member states. InUnder ~~addition~~European Commission Regulation 726/2004, ~~large~~the centralized authorization procedure is required for all biotechnology-~~scale~~derived ~~production~~medicinal ~~protocols~~products developed through recombinant DNA technology, controlled expression of genes coding for biologically active proteins, and ~~written~~hybridoma ~~standard~~and ~~operating~~monoclonal ~~procedures~~antibody methods. It is also required for ~~each~~designated ~~aspect~~orphan medicinal products and all new active substances indicated for the treatment of ~~commercial~~AIDS, ~~manufacture~~cancer, ~~and~~neurodegenerative ~~testing~~disorder, ~~must~~or diabetes. Under the EMA centralized procedure, the marketing approval of BiovaxID can be ~~developed~~simultaneously obtained throughout all EU-member countries with a single MAA. As part of the EMA’s centralized procedure, the MAA is assessed by the EMA’s CHMP, which designates from within its membership, a Rapporteur and Co-Rapporteur, as well as a PRAC Rapporteur and Co-Rapporteur. The Rapporteurs and Co-Rapporteurs are assigned with the primary responsibility of preparing and delivering an approvability evaluation report, supported by a team of assessors from their National Authority. On December 3, 2013, we submitted an MAA under a centralized procedure with the EMA for BiovaxID.

28Under Canadian regulatory systems, the manufacture and sale of new drugs are controlled by Health Canada. NDSs are be submitted for regulatory approval in Canada. Upon sufficient evidence to support safety, efficacy or quality claims for a NDS, a product is issued a Notice of Compliance (“NOC”) and a Drug Identification Number (“DIN”) indicating that the biologic is approved for sale in Canada. All drugs that are marketed in Canada are subject to the Food and Drugs Act and Regulations. The Biologics and Genetic Therapies Directorate is responsible for the review and approval of all types of drug submissions for Biological (Schedule D) and Radiopharmaceutical (Schedule C) drug products, including, but not limited to NDSs. For the regulatory requirements specific to Biological (Schedule D to the Act) drugs, please refer to Divisions 4, of Part C of the Regulations. For general regulatory requirements concerning all drugs, including Good Manufacturing Practices, please refer to Divisions 1, 1a, 2, 5 and 8 of Part C of the Regulations.

~~Table~~Third-Party ofReimbursement ~~Contents~~and Pricing Controls

~~Phase~~In 1,the 2,U.S. and 3in ~~testing~~international ~~may~~markets, ~~not~~sales beof ~~completed~~pharmaceutical ~~successfully~~products ~~within~~depend ~~any~~in ~~specified~~significant ~~time~~part ~~period,~~on ~~if at all. The FDA closely monitors~~ the ~~progress~~availability of ~~each~~reimbursement ofto the ~~three~~consumer ~~phases~~from ofthird-party ~~clinical~~payers, ~~trials~~such ~~that~~as ~~are~~government ~~conducted under an IND~~ and ~~may,~~private atinsurance ~~its~~plans. ~~discretion,~~Third-party ~~reevaluate,~~payers ~~alter,~~are ~~suspend,~~increasingly orchallenging ~~terminate~~ the ~~testing~~prices ~~based~~charged ~~upon~~for ~~the~~medical ~~data~~products ~~accumulated to that point~~ and ~~the FDA’s assessment of the risk/benefit ratio to the patient~~services. ~~The~~It ~~FDA~~will ~~may~~be ~~suspend~~time-consuming orand ~~terminate~~expensive ~~clinical trials at any time~~ for ~~various~~us ~~reasons,~~to ~~including~~go athrough ~~finding that~~ the ~~subjects~~process orof ~~patients~~seeking ~~are~~reimbursement ~~being~~from ~~exposed~~Medicare toand anprivate ~~unacceptable health risk~~payers. ~~The FDA~~Our ~~can~~product ~~also~~candidates ~~request~~may ~~additional~~not ~~clinical trials~~ be ~~conducted~~considered ascost ~~a condition to product approval. Additionally~~effective, ~~new~~and ~~government~~coverage ~~requirements~~and reimbursement may not be ~~established~~available ~~that could delay~~ or ~~prevent~~sufficient ~~regulatory~~to ~~and~~allow ~~marketing~~us ~~approval~~to ofsell our product candidates ~~under~~ ~~development.~~on ~~Furthermore,~~a ~~institutional~~competitive ~~review~~and ~~boards,~~profitable ~~which~~basis. ~~are~~The ~~independent~~passage ~~entities~~of ~~constituted~~the toMedicare ~~protect~~Prescription ~~human~~Drug ~~subjects~~and inModernization ~~the~~Act ~~institutions~~of in2003 ~~which~~imposes ~~clinical~~new ~~trials~~requirements ~~are~~for ~~being conducted, have~~ the ~~authority~~distribution toand ~~suspend~~pricing ~~clinical~~of ~~trials~~prescription atdrugs ~~any time~~which ~~for~~may aaffect ~~variety~~the marketing of ~~reasons,~~our ~~including~~product ~~safety issues~~candidates.

~~New~~In ~~Drug~~many ~~Application~~foreign markets, including the member states of the EU, pricing of pharmaceutical products is subject to governmental control, mainly through pricing and reimbursement regulations under the centralized healthcare systems in place in EU member states. In some EU jurisdictions, an approved medication cannot be marketed until an agreed-upon price structure is in place. Various forms of pricing controls tend to exert downward pressure on pricing of pharmaceutical products in the EU. In the U.S., there have been, and we expect that there will continue to be, a number of federal and state proposals to implement similar governmental pricing control. While we cannot predict whether such legislative or ~~Biologics~~regulatory ~~License~~proposals ~~Application~~will be adopted, the adoption of such proposals could have a material adverse effect on our business, financial condition and profitability.

~~After~~Liability the successful completion of Phase 3 clinical trials, the sponsor of the new drug submits a NDA or BLA, in the case of biologics, to the FDA requesting approval to market the product for one or more indications. A NDA, or BLA, is a comprehensive, multi-volume application that includes, among other things, the results of all preclinical and clinical studies, information about the drug’s composition, and the sponsor’s plans for producing, packaging, and labeling the drug. Under the Pediatric Research Equity Act of 2003, an application also is required to include an assessment, generally based on clinical study data, on the safety and efficacy of drugs for all relevant pediatric populations before the NDA is submitted. The statute provides for waivers or deferrals in certain situations. In most cases, the NDA or BLA must be accompanied by a substantial user fee. In return, the FDA assigns a goal of 10 months from acceptance of the NDA or BLA to return of a first “complete response,” in which the FDA may approve the product or request additional information. Insurance

~~The~~We ~~submission~~may ofbe ~~the~~exposed ~~application~~to ispotential noproduct ~~guarantee~~liability ~~that~~claims ~~the~~by ~~FDA~~users ~~will~~of ~~find~~our itproduct ~~complete and accept it for filing~~candidates. ~~The~~Our ~~FDA~~business ~~reviews~~segments ~~all~~may ~~NDAs~~expose ~~and~~us ~~BLAs submitted~~to ~~before~~potential itrisk ~~accepts~~of ~~them for filing~~liability. We Itseek ~~may refuse~~ to ~~file~~obtain ~~the~~agreements ~~application~~from ~~and~~contract ~~request~~production ~~additional~~customers ~~information~~to ~~rather~~mitigate ~~than~~such ~~accept~~potential ~~the~~liability ~~application~~and ~~for~~to ~~filing,~~indemnify inus ~~which~~under ~~case,~~certain ~~the~~circumstances. ~~application~~The ~~must~~terms beand ~~resubmitted~~conditions ~~with~~of ~~the~~our ~~supplemental information.~~sales ~~After~~and ~~application~~instruments isinclude ~~deemed~~provisions ~~filed~~which byare ~~the~~intended ~~FDA,~~to ~~the~~limit ~~FDA~~our ~~reviews~~liability anfor ~~NDA or BLA to determine~~indirect, ~~among other things~~special, ~~whether~~incidental aor ~~product~~consequential ~~is safe and effective for its intended use~~damages. ~~The~~There ~~FDA~~can ~~has~~be ~~substantial~~no ~~discretion~~assurance, inhowever, ~~the approval process and may disagree with an applicant’s interpretation of the data submitted in its NDA or BLA. Drugs~~ that ~~successfully~~we ~~complete~~will ~~NDA or BLA review may~~ be ~~marketed~~successful in ~~the~~obtaining ~~U.S.,~~such ~~subject~~agreements toor ~~all~~that ~~conditions~~such ~~imposed by the FDA. Prior to granting approval~~indemnification, ~~the~~ ~~FDA~~if ~~generally conducts an inspection of the facilities~~obtained, ~~including outsourced facilities, which~~ will beadequately ~~involved~~protect inus ~~the~~against ~~manufacture,~~potential ~~production,~~claims. The ~~packaging,~~terms ~~testing~~ and ~~control~~conditions of ~~the~~our ~~drug~~sales ~~product~~and ~~for~~instruments ~~cGMP~~include ~~compliance.~~provisions ~~The~~which ~~FDA~~are ~~will~~intended ~~not~~to ~~approve~~limit ~~the application~~our ~~unless~~liability ~~cGMP~~for ~~compliance is satisfactory. If the FDA determines that the marketing application~~indirect, ~~manufacturing process~~special, incidental or ~~manufacturing~~consequential ~~facilities~~damages. We ~~are~~presently ~~not~~maintain ~~acceptable,~~product itliability ~~will~~insurance ~~outline~~coverage ~~the deficiencies~~ in the ~~submission~~aggregate and ~~will~~per ~~often request~~occurrence ~~additional~~of ~~testing or information~~$2.0 ~~Notwithstanding the submission of any requested additional information~~million, ~~the~~in ~~FDA~~connection ~~ultimately~~with ~~may~~our ~~decide~~product ~~that~~candidates ~~the~~and ~~marketing~~our ~~application~~products ~~does not satisfy the regulatory criteria for approval~~ and ~~refuse~~services, ~~to approve~~in ~~the~~amounts ~~application~~which bywe ~~issuing~~believe ~~a “not approvable” letter or a “complete response” letter requiring additional steps~~ to be ~~completed~~adequate ~~before~~and ~~approval.~~on acceptable terms.

~~Biologics~~Although, ~~(such~~we asbelieve ~~BiovaxID™)~~that ~~differ~~our ~~from~~current ~~other~~level ~~drugs~~of ~~for~~coverage ~~human~~is ~~use~~adequate into ~~that~~protect ~~they~~our ~~must~~business ~~include~~from ~~more~~foreseeable ~~detailed~~product ~~chemistry~~liability ~~and~~claims, ~~manufacturing~~we ~~information.~~may ~~This~~seek ~~is necessary~~ to ~~help~~increase ~~ensure~~our ~~the~~insurance ~~purity~~coverage ~~and quality~~in of the ~~product,~~future ~~for~~in ~~example~~the toevent ~~help~~that ~~ensure~~we ~~that~~significantly itincrease isour ~~not~~level ~~contaminated~~of bycontract anproduct ~~undesired~~and ~~microorganism~~services and/or bythe ~~another~~initiation ~~contaminant. The~~of ~~sponsoring~~any ~~company’s~~clinical ~~manufacturing~~trial ~~facility~~program. ~~must~~There ~~also~~can ~~supply~~be ~~product~~no ~~specific~~assurance; ~~facility~~however, ~~information~~ that ~~outlines~~we ~~the~~will ~~method~~be ofable ~~manufacture~~to ofmaintain ~~the~~our ~~biologic~~existing incoverage ~~significant~~or ~~detail,~~obtain ~~since~~additional ~~slight~~coverage ~~variations~~on ~~can~~acceptable ~~result~~terms, inor athat ~~different~~such ~~final~~insurance ~~product.~~will ~~Further,~~provide anadequate ~~inspection~~coverage ofagainst ~~the~~all ~~manufacturing~~potential ~~facility~~claims isto ~~completed~~which towe ~~assess~~may ~~the~~be ~~production~~exposed. ~~process~~A ~~and facility~~successful ~~since~~partially ~~these~~or ~~aspects~~completely ~~also~~uninsured ~~have~~claim aagainst ~~significant~~us ~~impact~~could onhave ~~the~~a ~~safety~~material ~~and~~adverse ~~efficacy~~effect ofon ~~the~~our ~~product~~operations.

~~Post-Approval Phase~~ 34

If the FDA approves the NDA or BLA, as applicable, the pharmaceutical product becomes available for physicians to prescribe in the U.S. After approval, the product is still subject to continuing regulation by FDA, including record keeping requirements, submitting periodic reports to the FDA, reporting of any adverse experiences with the product, and complying with drug sampling and distribution requirements. In addition, the sponsor is required to maintain and provide updated safety and efficacy information to the FDA. The sponsor is also required to comply with requirements concerning advertising and promotional labeling. In that regard, advertising and promotional materials must be truthful and not misleading. The sponsor is also prohibited from promoting any non-FDA approved or “off-label” indications of products. Failure to comply with those requirements could result in significant enforcement action by the FDA, including warning letters, orders to pull the promotional materials, and substantial fines. Also, quality control and manufacturing procedures must continue to conform to cGMP after approval. EMPLOYEES

29As of September 30, 2013, we had 45 employees (4 of whom are part-time employees). Advanced degrees and certifications of our staff include four Ph.D.s, one M.D., one CPA, and two JDs. From time to time, we employ and supplement our staff with temporary employees and consultants, as required. We believe that our relations with employees are satisfactory. None of our employees are covered by a collective bargaining agreement. Each of our employees has entered into confidentiality, intellectual property assignment and non-competition agreements with us.

~~Table~~Our ability to continue to develop and improve marketable products and to establish and maintain our competitive position in light of ~~Contents~~technological developments will depend, in part, upon our ability to attract and retain qualified technical personnel.

~~Drug~~CORPORATE and biologics manufacturers and their subcontractors are required to register their facilities and products manufactured annually with FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA to assess compliance with cGMP regulations. Facilities may also be subject to inspections by other federal, foreign, state, or local agencies. In addition, approved biological drug products may be subject to lot-by-lot release testing by the FDA before these products can be commercially distributed. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance. INFORMATION

~~In addition,~~We ~~following~~are ~~FDA~~incorporated ~~approval~~in ofthe aState ~~product, discovery~~ of ~~problems~~Delaware. ~~with~~Our aprincipal ~~product~~executive oroffices ~~the~~are ~~failure~~located toat ~~comply~~300 ~~with~~South ~~requirements~~Hyde ~~may~~Park ~~result~~Avenue, ~~in restrictions on a product~~Suite 210, ~~manufacturer~~Tampa, orFlorida ~~holder of an approved marketing application~~33606, ~~including withdrawal~~and orour ~~recall~~telephone ofnumber ~~the~~at ~~product from the market or other voluntary or FDA-initiated action~~ that ~~could~~address ~~delay~~is ~~further marketing~~(813) 864-2554. ~~Newly~~Our ~~discovered~~website oris ~~developed safety or effectiveness data may require changes to a product’s approved labeling, including the addition of new warnings and contraindications~~www. Also, the FDA may require post-market testing and surveillance to monitor the product’s safety or efficacy, including additional clinical studies, known as Phase 4 clinical trials, to evaluate long-term effectsbiovest. com.

~~Orphan~~ADDITIONAL ~~Drug~~INFORMATION ~~Designation~~AND ~~and~~WHERE ~~Exclusivity~~TO FIND IT

~~Pursuant~~Our toAnnual ~~the~~Reports ~~U.S.~~on ~~Orphan~~Form ~~Drug Act~~10-K, aQuarterly ~~sponsor~~Reports ~~may~~on ~~request~~Form ~~that~~10-Q, ~~the~~Current ~~FDA~~Reports ~~designate~~on aForm ~~drug~~8-K ~~intended~~and amendments to ~~treat~~those areports ~~“rare~~filed ~~disease~~ or ~~condition”~~furnished aspursuant ~~an “orphan drug.” The term “orphan drug” can refer~~ to ~~either~~ Section 13(a) ~~drug~~ or ~~biologic.~~15(d) Aof ~~rare~~the ~~disease~~Exchange orAct ~~condition~~are isfiled ~~defined~~with ~~as one which affects less than 200,000 people in~~ the USEC.~~S.,~~ Such orreports ~~which~~and ~~affects~~other ~~more~~information ~~than~~that ~~200,000~~we ~~people,~~file ~~but~~with ~~for which~~ the ~~cost~~SEC ofare ~~developing and making~~ available ~~the~~ ~~product~~free ~~is not expected to be recovered from sales~~ of ~~the~~charge ~~product~~on inour ~~the~~website U(www.Sbiovest.com) Inas ~~the~~soon ~~U.S.,~~as ~~Orphan~~reasonably ~~Drug~~practicable ~~designation~~after ~~must~~we beelectronically ~~requested~~file ~~before~~such ~~submitting~~material awith, ~~NDA~~ or ~~BLA.~~furnish ~~Upon~~it ~~the~~to, ~~approval of~~ the ~~first~~SEC. The ~~NDA~~public ormay ~~BLA~~read ~~for~~and acopy ~~drug~~any ~~designated~~materials ~~as an orphan drug for a specified indication, the sponsor of~~ that ~~NDA~~we orfile ~~BLA~~with ~~is entitled to seven years of exclusive marketing rights in~~ the ~~U.S.~~SEC ~~for~~at the ~~orphan~~SEC’s ~~drug~~Public ~~for~~Reference ~~the~~Room ~~same~~at ~~indication~~100 ~~unless~~F ~~the~~Street, ~~sponsor~~NE, ~~cannot~~Washington, ~~assure~~DC ~~the~~20549, ~~availability~~on ofofficial ~~sufficient quantities~~business ofdays ~~the~~during ~~drug to meet~~ the ~~needs~~hours of ~~persons~~10:00 ~~with the disease~~a.m. ~~However, orphan drug status is particular~~ to ~~the~~3:00 ~~approved~~p.m. The ~~indication~~public ~~and~~may ~~does~~obtain ~~not~~information ~~prevent~~on ~~another~~the ~~company~~operations ~~from seeking approval~~ of anthe ~~off-patent~~Public ~~drug~~Reference ~~that~~Room ~~has~~by ~~other~~calling ~~labeled indications~~the ~~that~~SEC ~~are~~at ~~not under orphan or other exclusivities~~1-800-SEC-0330. The ~~period~~SEC ofmaintains ~~orphan~~an ~~exclusivity~~Internet issite ~~concurrent with any patent or other exclusivity~~ that ~~relates~~contains toreports, ~~the~~proxy ~~drug~~and orinformation ~~biologic.~~statements ~~Orphan~~and ~~drugs~~other ~~may~~information ~~also~~regarding beissuers ~~eligible~~that ~~for~~file ~~federal~~electronically ~~income tax credits for costs associated~~ with the ~~drugs’~~SEC ~~development~~at http://www.sec.gov. The Incontents ~~order to increase the development and marketing~~ of ~~drugs~~these ~~for~~websites ~~rare~~are ~~disorders,~~not ~~regulatory~~incorporated ~~agencies~~into ~~outside~~this ~~the U~~filing.S. Further, ~~such as~~ the EUforegoing ~~(which~~references ~~has~~to athe ~~ten~~URLs ~~year~~for ~~exclusivity~~these ~~marketing~~websites ~~period)~~are ~~have enacted~~intended ~~regulations similar~~ to ~~the~~be ~~Orphan~~inactive ~~Drug~~textual ~~Act.~~references only.

~~Orphan~~ITEM ~~Drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process~~1A. IfRISK a product which has an Orphan Drug designation subsequently receives the first FDA approval for the indication for which it has such designation, the product is entitled to a marketing exclusivity. For seven years, the FDA may not approve any other application, including NDAs or BLAs, to market the “same drug” for the same indication. The only exceptions are (i) where the second product is shown to be “clinically superior” to the product with Orphan Drug exclusivity, as that phrase is defined by the FDA and (ii) if there is an inadequate supply. FACTORS

~~Manufacturing~~Statements in this Annual Report on Form 10-K are not strictly historical in nature are forward-looking statements. These statements may include, but are not limited to, statements about: the timing of the commencement, enrollment, and completion of our clinical trials for our product candidates; the progress or success of our product development programs; the status of regulatory approvals for our product candidates; the timing of product launches; our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others; and our estimates for future performance, anticipated operating losses, future revenues, capital requirements, and our needs for additional financing. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” “goal,” or other variations of these terms (including their use in the negative) or by discussions of strategies, plans or intentions. These statements are only predictions based on current information and expectations and involve a number of risks and uncertainties. The underlying information and expectations are likely to change over time.

~~Among~~Factors ~~the conditions for regulatory/marketing approval the regulatory agency, such as the FDA, the EMA and Health Canada, requires~~ that ~~the~~could ~~prospective~~cause ~~manufacturer’s~~actual ~~quality~~results ~~control and manufacturing procedures continually conform~~ to ~~cGMP~~differ ~~regulations~~materially ~~(which~~from ~~are~~what ~~regulations~~is ~~governing~~expressed ~~the~~or ~~manufacture,~~forecasted ~~processing, packing,~~in ~~storage~~our ~~and~~forward-looking ~~testing~~statements ~~of drugs and biologics intended for human use). In complying with cGMP~~include, ~~manufacturers~~but ~~must devote extensive time, money and effort in the area of production and quality control and quality assurance to maintain full technical compliance. Manufacturing facilities and company records~~ are ~~subject to periodic inspections by the regulatory agency to ensure compliance. If a manufacturing facility is~~ not inlimited substantial compliance with these requirements, regulatory enforcement action may be taken by the regulatory agency, which may include seeking an injunction against shipment of products from the facility and recall of products previously shipped from the facility. Changes to the manufacturing process or site during or following the completion of clinical trials requires sponsors to demonstrate to the regulatory agency that the product under new conditions is comparable to the product that was the subject of earlier clinical testing. This requirement applies to relocations or expansions of manufacturing facilities, ~~or additional facilities that may be required upon successful commercialization of~~ the product. A showing of comparability requires data demonstrating that the product continues to be safe, pure, and potent and may be based on chemical, physical, and biological assays and, in some cases, other non-clinical data. following:

30Risk Related to Our Business

~~Table~~We have a history of ~~Contents~~operating losses and expect to incur further losses.

~~Medical~~We ~~Device~~have ~~Regulation~~never been profitable and we have incurred significant losses and cash flow deficits. For the years ended September 30, 2013 and 2012 we reported negative cash flows from operating activities of $5.7 million and $4.3 million, respectively. We anticipate that operations may continue to show losses and negative cash flow, particularly with the expenses associated with our continued interim analyses and efforts to seek regulatory approval for BiovaxID™. There is no assurance that the additional required funds can be obtained on terms acceptable or favorable to us, if at all. The audit opinion issued by our independent auditors with respect to our consolidated financial statements for fiscal 2013 indicates that there is substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. We expect to receive a similar audit opinion from our independent auditors with respect to our consolidated financial statements for fiscal 2014.

~~New~~Our ~~medical~~ability ~~devices are also subject~~ to ~~FDA~~achieve ~~approval~~ and ~~extensive~~sustain ~~regulation~~profitability ~~under~~is ~~the~~to ~~FDCA.~~a ~~Under~~large ~~the~~degree ~~FDCA,~~dependent ~~medical~~on ~~devices~~obtaining ~~are~~regulatory/marketing ~~classified~~approval ~~into~~for ~~one~~BiovaxID. ofWe ~~three~~may ~~classes:~~not ~~Class~~be I,successful ~~Class~~in ~~II,~~our orefforts ~~Class~~to ~~III.~~develop ~~The classification~~and ofcommercialize aBiovaxID. ~~device~~We ~~into~~may ~~one~~not ofbe ~~these~~successful ~~three~~in ~~classes~~our ~~generally~~efforts ~~depends~~and oneven ~~the~~if ~~degree~~successful, ofwe ~~risk~~may ~~associated~~not ~~with~~be ~~the~~able ~~medical~~to ~~device~~profitably ~~and~~commercialize ~~the~~any ~~extent~~ of ~~control~~our ~~needed~~drug ~~to ensure safety and effectiveness~~products.

Class I devices are those for which safety and effectiveness can be assured by adherence to a set of general controls. These general controls include compliance with the applicable portions of the FDA’s Quality System Regulation (“QSR”), which sets forth good manufacturing practice requirements; facility registration and product reporting of adverse medical events listing; truthful and non-misleading labeling; and promotion of the device only for its cleared or approved intended uses. Class II devices are also subject to these general controls, and any other special controls as deemed necessary by the FDA to ensure the safety and effectiveness of the device. Review and clearance by the FDA for these devices is typically accomplished through the so-called 510(k) pre-market notification procedure. A Class III device requires approval of a premarket application (“PMA”), an expensive, lengthy and uncertain process requiring many years to complete. 35

~~When~~Our ~~510(k)~~independent ~~clearance~~registered ispublic ~~sought,~~accountants ahave ~~sponsor must~~expressed ~~submit~~substantial adoubt ~~pre-market~~as ~~notification demonstrating that the proposed device is substantially equivalent~~ to aour ~~previously~~ability ~~approved device. If the FDA agrees that the proposed device is substantially equivalent~~ to ~~the~~continue ~~predicate~~as ~~device, then 510(k) clearance to market will be granted. After~~ a ~~device~~going receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, requires a new 510(k) clearance or could require pre-market approvalconcern. ~~Our instruments and disposables used for the production of cell cultures are generally regulated as Class I devices exempt from the 510(k) clearance process.~~

~~Clinical~~We ~~trials~~expect ~~are~~to ~~almost~~continue ~~always~~to ~~required~~incur tosubstantial ~~support~~net aoperating ~~PMA~~losses at least until BiovaxID receives marketing approval and ~~are~~acceptance, ~~sometimes~~which ~~required~~may ~~for~~never occur. Continued operating losses will impair our ability to continue operations. We may not be able to generate sufficient product revenue to become profitable on a ~~510(k)~~sustained ~~pre-market~~basis, ~~notification~~or at all. ~~These~~We ~~clinical~~have ~~trials generally~~operating ~~require~~and ~~submission~~liquidity ofconcerns andue ~~application~~to ~~for~~our ansignificant ~~investigational~~net ~~device~~losses ~~exemption~~and ~~(“IDE”)~~negative cash flows from operations. AnAs ~~IDE~~a ~~must~~result beof ~~supported~~these byand ~~pre-clinical~~other ~~data~~factors, ~~such~~our asindependent ~~animal~~registered ~~and~~public ~~laboratory~~accountants, ~~testing~~Cherry ~~results~~Bekaert LLP, ~~which~~have ~~show~~indicated, in their report to our 2013 consolidated financial statements, that ~~the~~there ~~device~~is substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is ~~safe~~dependent upon generating sufficient cash flow to ~~test~~conduct operations and obtaining additional capital and financing. Any financing activity is likely to result in ~~humans~~ significant dilution to current shareholders. Our consolidated financial statements have been prepared assuming we will continue as a going concern and do not include any adjustments that might result from the ~~study~~outcome ~~protocols~~of this uncertainty. In addition, our projected cash receipts from operations for fiscal 2014 are ~~scientifically~~anticipated ~~sound~~to be insufficient to finance operations without funding from other sources. ~~The~~Historically, ~~IDE~~we ~~must~~have behad ~~approved~~difficulty in ~~advance~~meeting byour ~~the~~cash ~~FDA~~requirements. ~~for~~We ahave, ~~specified~~in ~~number~~part, met our cash requirements through proceeds from our cell culture and instrument manufacturing activities, various financing transactions, the use of ~~patients~~cash on hand, ~~unless~~short-term borrowings (primarily from affiliates), and by trade-vendor credit. There can be no assurances that management will obtain the necessary funding, reduce the level of historical losses or achieve successful commercialization of product iscandidates. ~~deemed~~Continuation as a ~~non-significant~~going ~~risk~~concern ~~device~~is ultimately dependent upon achieving profitable operations and ispositive ~~eligible~~operating ~~for~~cash ~~more~~flows ~~abbreviated~~sufficient ~~IDE requirements.~~to pay all obligations as they come due.

~~Both~~Our ~~before~~operating ~~and~~results ~~after~~may afluctuate ~~medical~~widely ~~device~~between isreporting ~~commercially distributed, manufacturers and marketers of the device have ongoing responsibilities under FDA regulations~~periods. The FDA reviews design and manufacturing practices, labeling and record keeping, and manufacturers’ required reports of adverse experiences and other information to identify potential problems with marketed medical devices. Device manufacturers are subject to periodic and unannounced inspection by the FDA for compliance with the QSR, cGMP requirements that govern the methods used in, and the facilities and controls used for, the design, manufacture, packaging, servicing, labeling, storage, installation, and distribution of all finished medical devices intended for human use.

IfOur ~~the~~operating ~~FDA~~results ~~finds~~may ~~that~~vary asignificantly ~~manufacturer~~from ~~has~~quarter-to-quarter ~~failed~~or year-to-year, ~~comply~~depending oron ~~that~~factors asuch ~~medical~~as ~~device~~timing isof ~~ineffective~~biopharmaceutical ordevelopment ~~poses~~and ancommercialization ~~unreasonable~~of ~~health~~products ~~risk,~~by itour ~~can~~customers, ~~institute or~~the ~~seek~~timing aof ~~wide~~increased ~~variety~~research ofand ~~enforcement~~development ~~actions~~and sales and ~~remedies~~marketing expenditures, ~~ranging~~the ~~from~~timing aand ~~public~~size ~~warning~~of ~~letter~~contracts and whether we introduce to ~~more~~the ~~severe~~market ~~actions~~new ~~such~~products ~~as:~~or ~~fines~~processes. Consequently, ~~injunctions~~revenues, ~~and~~profits ~~civil~~or ~~penalties;~~losses ~~recall~~may orvary ~~seizure~~significantly offrom ~~products;~~quarter-to-quarter ~~operating~~or ~~restrictions~~year-to-year, ~~partial~~and ~~suspension~~revenue, profits or ~~total~~ ~~shutdown~~losses in any period will not necessarily be indicative of ~~production;~~results ~~refusing~~in ~~requests~~subsequent ~~for~~periods. ~~510(k)~~These ~~clearance~~period-to-period orfluctuations ~~PMA~~in ~~approval~~financial ofresults ~~new~~may ~~products;~~have ~~withdrawing~~a ~~510(k)~~significant ~~clearance~~impact oron ~~PMA~~the ~~approvals~~market ~~already~~price, ~~granted;~~if ~~and~~any, ~~criminal~~of ~~prosecution.~~our securities.

~~The~~Because ~~FDA~~our ~~also~~consolidated ~~has~~financial statements for the ~~authority~~year toended ~~require~~September ~~repair~~30, ~~replacement~~2013 orreflect ~~refund~~fresh-start accounting adjustments made on emergence from bankruptcy and because of the ~~cost~~effects of ~~any~~the ~~medical~~transactions ~~device.~~that became effective pursuant to the Plan, financial information in our current and future financial statements will not be comparable to our financial information from prior periods.

In connection with our emergence from bankruptcy, we adopted fresh-start accounting as of July 1, 2013 in accordance with ASC 852-10. The ~~FDA~~adoption ~~also~~of ~~administers~~fresh-start accounting resulted in our becoming a new entity for financial reporting purposes. As required by fresh-start accounting, our assets and liabilities have been adjusted to fair value, and certain ~~controls~~assets ~~over~~not ~~the~~previously ~~export~~recognized in our financial statements have been recognized. In addition to fresh-start accounting, our financial statements reflect all effects of ~~medical~~the ~~devices~~transactions ~~from~~implemented by the UPlan.S. Accordingly, asthe ~~international~~financial ~~sales~~statements ofprior ~~medical~~to ~~devices~~July ~~that~~1, ~~have~~2013 are not ~~received~~comparable ~~FDA~~with ~~approval~~the ~~are~~financial ~~subject~~statements tofor ~~FDA~~periods ~~export requirements~~on or after July 1, 2013. ~~Additionally~~Furthermore, ~~each~~the ~~foreign~~estimates ~~country~~and ~~subjects~~assumptions ~~such~~used ~~medical~~to ~~devices~~implement fresh-start accounting are inherently subject to ~~its~~significant ~~own~~uncertainties ~~regulatory~~beyond ~~requirements~~our control. InAccordingly, we cannot provide assurance that the EUestimates, aassumptions, ~~single~~and ~~regulatory~~values ~~approval~~reflected ~~process~~in ~~has~~the ~~been~~valuations ~~created~~will be realized, and ~~approval~~actual isresults ~~represented~~could byvary ~~the~~materially. For further information about fresh-start accounting, see Note 4 — “CEFresh-Start reporting” ~~Mark.~~in Notes to Consolidated Financial Statements.

31We anticipate that we will need substantial additional funding in the future, and if we are unable to raise capital when needed, we would be forced to delay, reduce, or eliminate our product development programs or commercialization efforts.

~~Table~~Developing biopharmaceutical products, conducting clinical trials, establishing manufacturing capabilities, and marketing developed products is expensive. We anticipate that we will need to raise substantial additional capital in the future in order to complete the commercialization of ~~Contents~~our product candidates, to continue to pursue the submission of regulatory/marketing approval applications in various jurisdictions, for our product candidates and to fund the development and commercialization of our product candidates. Further, as a result of our formal guidance meeting with the FDA, we anticipate that we will need to raise substantial additional capital in order to conduct the second Phase 3 clinical trial for BiovaxID. Additional sources of funding have not been established. Additional financing is currently being sought from a number of sources, including the sale of equity or debt securities, strategic collaborations, recognized research funding programs, as well as domestic and/or foreign licensing of BiovaxID, however, we may not be successful in obtaining such additional financing.

~~Other~~We ~~Regulation~~have received a report from our independent auditors on our consolidated financial statements for our years ended September 30, 2013 and 2012, in ~~the~~which ~~United~~our ~~States~~auditors have included explanatory paragraphs indicating that our significant historical and expected future net losses cause substantial doubt about our ability to continue as a going concern.

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (2010) (collectively, the “PPACA”). Enacted in March 2010, the PPACA, makes changes that could significantly impact the development and commercialization and of our product candidates. Significant measures contained in the PPACA include, for example, coordination and promotion of research on comparative clinical effectiveness of different technologies and procedures, initiatives to revise Medicare payment methodologies, such as bundling of payments across the continuum of care by providers and physicians, and initiatives to promote quality indicators in payment methodologies. The PPACA also includes significant new fraud and abuse measures, including required disclosures of financial arrangements with physician customers, lower thresholds for violations and increasing potential penalties for such violations. In addition, the PPACA establishes an Independent Payment Advisory Board (“IPAB”), to reduce the per capita rate of growth in Medicare spending. The IPAB has broad discretion to propose policies to reduce expenditures, which may have a negative impact on payment rates for services or therapeutics, including therapeutics like BiovaxID™. In addition to the PPACA, the effect of which cannot presently be fully quantified given its relatively recent enactment, various healthcare reform proposals have also emerged from federal and state governments. Changes in healthcare policy could substantially impact the development and commercialization of BiovaxID. We cannot predict whether future healthcare initiatives will be implemented at the federal or state level or in countries outside of the U.S. in which we may do business, or the effect any future legislation or regulation will have on us. The taxes imposed by the new federal legislation and the expansion in government’s role in the U.S. healthcare industry may result in decreased profits to us, lower reimbursements by payers for our product candidates or reduced medical procedure volumes, all of which may adversely affect our business, financial condition and results of operations, possibly materially. 36

~~The~~We ~~Biologics~~expect ~~Price~~to ~~Competition~~seek ~~and Innovation~~additional ~~Act~~financing ~~(2010).~~from ~~The~~a ~~Biologics~~number ~~Price~~of ~~Competition~~sources, ~~and~~including ~~Innovation~~but ~~Act,~~not ~~establishes~~limited anto ~~abbreviated~~public ~~approval~~or ~~pathway~~private ~~for~~equity ~~“biosimilar”~~offerings, ~~biological~~debt ~~products~~financings, or corporate collaboration and licensing arrangements. ~~Among~~ To the ~~provisions~~extent ~~potentially~~that ~~applicable~~we toraise additional funds by issuing equity securities, our ~~product~~stockholders ~~candidates~~may ~~are (1) innovator~~experience ~~manufacturers~~additional ofdilution, ~~reference~~and ~~biological~~debt ~~products~~financing, ~~(such~~if asavailable, ~~BiovaxID™)~~may ~~are~~involve ~~granted~~restrictive 12covenants. ~~years~~If we raise funds through the issuance of ~~exclusive~~equity ~~use~~securities, ~~before~~our ~~biosimilars~~current ~~can~~shareholders’ equity interests could be ~~approved~~substantially ~~for~~diminished. ~~marketing~~If inwe ~~the~~raise ~~U.S.~~additional ~~and~~funds ~~(2) an~~through ~~application~~collaboration ~~for~~and alicensing ~~biosimilar~~arrangements, ~~product~~it may ~~not~~ be ~~submitted~~necessary to ~~the~~relinquish ~~FDA~~some ~~until~~of 4our ~~years~~rights ~~after~~to ~~the~~our ~~date~~technologies or our product candidates or grant licenses on ~~which~~terms ~~the~~that ~~BLA~~are ~~for~~not ~~the~~favorable ~~reference~~to ~~product~~us. ~~was~~We ~~first~~cannot ~~approved~~be certain that additional funding will be available on acceptable terms, or at all. ~~FDA~~ isIf ~~still~~adequate ~~early~~funds inare not available from the ~~process~~foregoing sources, we may consider additional strategic financing options, including sales of ~~developing~~assets ~~regulations~~or business units, or we may be required to ~~implement~~delay, reduce the ~~provisions~~scope of, ~~this~~or ~~legislation.~~eliminate one or more of our research or development programs or curtail some of our commercialization efforts.

~~Toxic~~We Substances Control Act. The EPA has promulgated regulations under Section 5 of the Toxic Substances Control Act (“TSCA”), which require notification procedures for review of certain so-called intergeneric microorganisms before they are introduced into commerce. Intergeneric microorganisms are those formed by deliberate combinations of genetic material from organisms classified in different taxonomic genera, which are types of animal or plant groups. The regulations provide exemptions from the reporting requirements for new microorganisms used for research and development when the researcher or institution is in mandatory compliance with the National Institutes of Health Guidelines for Research Involving Recombinant DNA Molecules (“NIH Guidelines”). Those researchers voluntarily following the NIH Guidelines can, by documenting their use of the NIH Guidelines, satisfy EPA’s requirements for testing in contained structures. The EPA may enforce the TSCA through enforcement actions such as seizing noncompliant substances, seeking injunctive relief, and assessing civil or criminal penalties. We believe that our research and development activities involving intergeneric microorganisms comply with the TSCA, but there can be nounable ~~assurance~~to ~~that~~obtain ~~restrictions,~~necessary ~~fines~~additional ~~or penalties will not be imposed on us in the future~~financing.

~~Health~~The ~~Care~~capital ~~Coverage~~requirements ~~and~~for ~~Reimbursement.~~our ~~Commercial~~operations ~~success~~have inbeen ~~marketing~~ and ~~selling~~will ~~our~~continue ~~product~~to ~~candidates~~be ~~depends,~~significant. inOur ~~part,~~ability onto ~~the~~generate ~~availability of~~cash ~~adequate~~from ~~coverage~~operations ~~and~~is ~~reimbursement~~dependent ~~from~~upon, ~~third-party~~among ~~health~~other ~~care payers~~things, ~~such~~increased asdemand ~~government~~for ~~and~~our ~~private~~product ~~health~~candidates ~~insurers~~ and ~~managed~~services ~~care~~and ~~organizations. Third-party payers are increasingly challenging~~ the ~~pricing~~successful development of ~~medical~~direct ~~products~~marketing and ~~services. Government~~product ~~and~~distribution ~~private~~capabilities. ~~sector~~Our ~~initiatives~~ability to ~~limit~~obtain ~~the~~required ~~growth~~funding offrom ~~health~~debt ~~care~~or ~~costs,~~equity ~~including~~funding ~~price~~is ~~regulation,~~dependent ~~competitive~~on ~~pricing,~~numerous ~~coverage~~factors and ~~payment~~is ~~policies,~~considered ~~and~~uncertain. There ~~managed-care~~can ~~arrangements,~~be ~~are~~no ~~continuing~~assurance inthat ~~many~~we ~~countries~~will ~~where~~have wesufficient docapital ~~business, including~~resources ~~the~~to ~~U.S.~~implement ~~These~~our ~~changes~~business ~~are~~plan ~~causing~~and ~~the~~we ~~marketplace~~may toneed ~~put~~additional ~~increased~~external ~~emphasis~~debt onand/or ~~the~~equity ~~delivery~~financing ofto ~~more~~fund ~~cost-effective~~our ~~medical~~future ~~products~~operations.

~~Government~~We ~~programs,~~are ~~including~~largely ~~Medicare~~dependent and Medicaid, private health care insurance and managed-care plans have attempted to control costs by limiting the amount of reimbursement they will pay for particular procedures or treatments. This has created an increasing level of price sensitivity among customers for our product candidates. Examples of how limits on ~~drug coverage and reimbursement in~~ the ~~U.S.~~ ~~may~~success ~~cause drug price sensitivity include the growth~~ of ~~managed~~BiovaxID ~~care, changing Medicare reimbursement methodologies,~~ and drug rebates and price controls. Some third-party payers must also approve coverage for new or innovative devices or therapies before they will reimburse health care providers who use the medical devices or therapies. Even though a new medical product may have been cleared for commercial distribution, we may ~~find~~not ~~limited~~be ~~demand~~able ~~for~~to ~~the~~successfully ~~product~~commercialize ~~until reimbursement approval has been obtained from governmental and private third-party payers~~BiovaxID.

32We have expended and will continue to expend significant time, money, and effort on the development of BiovaxID and our other product candidates. We will incur significant costs and may never generate significant revenues from commercial sales of BiovaxID, if approved and our other product candidates. BiovaxID has not been approved for marketing in any jurisdiction, and it may never be commercialized. Before we can market and sell BiovaxID in the U.S., we will need to complete a second Phase 3 clinical trial, and we do not currently have funding for a second Phase 3 clinical trial.

~~Table~~If we fail to successfully commercialize BiovaxID, we may be unable to generate sufficient revenue to sustain and grow our business, and our business, financial condition, and results of ~~Contents~~operations will be adversely affected.

~~Anti-Kickback~~Before Laws. In the U.S., there are federal and state anti-kickback laws that prohibit the payment or receipt of kickbacks, bribes or other remuneration to induce the purchase, order or recommendation of health care products and services. These laws constrain the sales, regulatory/marketing ~~and~~approval ~~other~~can ~~promotional~~be ~~activities~~sought ofin ~~pharmaceutical companies, such as us, by limiting~~ the ~~kinds of financial arrangements we may have with prescribers, purchasers, dispensers and users of drugs and biologics. The~~ U.S. ~~Department of Health and Human Services (“HHS”) Office of Inspector General (“OIG”) has issued “Compliance Guidance”~~ for ~~pharmaceutical~~BiovaxID manufacturers which, among other things, identifies manufacturer practices implicating the federal anti-kickback law (42 U.S.C. §1320a-7b(b)) and describes elements of an effective compliance program. The OIG Compliance Guidance is voluntary, and we ~~have~~must ~~not~~successfully ~~adopted~~complete aadditional ~~formal~~clinical ~~compliance program modeled after the one described in the OIG Compliance Guidance. Although none of our practices have been subject to challenge under any anti-kickback laws~~trials, ~~due~~outcomes ~~to the breadth~~ of ~~the~~which ~~statutory~~are ~~provisions of some of these laws, it is possible that some of our practices might be challenged under one or more of these laws in the future~~uncertain. Violations of these laws can lead to civil and criminal penalties, including imprisonment, fines and exclusion from participation in federal health care programs. Any such violations could have a material adverse effect on our business, financial condition, results of operations or cash flows.

~~Health~~In ~~Information~~July ~~Privacy~~2012, and Security. Individually identifiable health information is subject to an array of federal and state regulation. Federal rules promulgated pursuant to the Health Information Portability and Accountability Act of 1996 (“HIPAA”) regulate the use and disclosure of health information by “covered entities” (which includes individual and institutional providers from which we ~~may~~conducted ~~receive~~a ~~individually~~formal ~~identifiable~~clinical ~~health~~meeting ~~information).~~with ~~These regulations govern, among other things,~~ the ~~use~~FDA ~~and~~in ~~disclosure~~order ~~of health information for research purposes, and require the covered entity~~ to ~~obtain~~define the ~~written~~path ~~authorization of the individual before using or disclosing health information~~ for ~~research~~BiovaxID’s U.S. ~~Failure~~regulatory of the covered entity to obtain such authorization (absent obtaining a waiver of the authorization requirement from an Institutional Review Board) could subject the covered entity to civil and criminal penaltiesapproval. As ~~the~~a ~~implementation~~result of this ~~regulation~~guidance ~~is still in its early phases~~meeting, we ~~may~~plan ~~experience~~to ~~delays~~conduct ~~and~~a ~~complex~~second ~~negotiations~~Phase as3 weclinical ~~deal with~~trial ~~each entity’s differing interpretation of the regulations and what is required for compliance. Further, HIPAA’s criminal provisions are not limited in their applicability~~ to ~~“covered~~complete ~~persons,” but apply to any “person” that knowingly and in violation of~~ the ~~statute~~clinical ~~obtains~~data orgained ~~discloses~~through ~~individually~~our ~~identifiable~~first ~~health~~Phase ~~information.~~3 ~~Also,~~clinical ~~where~~trial its customers or contractors are covered entities, including hospitals, universities, physicians or clinics, we may be required by the HIPAA regulations to enter into “business associate” agreements that subject us to certain privacy and ~~security~~our ~~requirements,~~BiovaxID ~~including~~development ~~making~~program ~~its books and records available for audit and inspection by HHS and implementing certain health information privacy and security safeguards. In addition, many states have laws that apply~~ to support the ~~use~~filing ~~and disclosure~~ of ~~health~~our ~~information,~~BLA ~~and~~for ~~these laws could also affect the manner in which we conduct its research and other aspects of its business~~BiovaxID. We ~~Such state laws~~ are ~~not~~preparing ~~preempted by the federal privacy law where they afford greater privacy protection~~ to ~~the~~initiate ~~individual.~~this ~~While~~second ~~activities~~Phase to3 ~~assure~~clinical ~~compliance~~trial ~~with~~subject ~~health information privacy laws are a routine business practice, we are unable~~ to ~~predict~~availability ~~the extent to which its resources may be diverted in the event~~ of ~~an investigation or enforcement action with respect to such laws~~funding.

~~Foreign~~Conducting ~~Regulation~~clinical trials is a lengthy, time-consuming, and expensive process, and the results of these trials are inherently uncertain. The time required to complete necessary clinical trials is often difficult, if not impossible, to predict. Our commencement and rate of completion of clinical trials may be delayed by many factors, including:

~~Whether~~• orineffectiveness ~~not we obtain FDA approval for a product, we may choose to seek approval~~ of our product ~~candidates~~candidate ~~by the comparable regulatory authorities of foreign countries. Like in the U.S., before we can commence clinical trials~~ or ~~marketing~~perceptions of our product candidates in a foreign country, we must submit a new drug application in that country. The requirements governing the conduct of clinical trials, product licensing, pricing, and reimbursement vary greatly from country to country. Although governed by ~~the~~physicians ~~applicable country, clinical trials conducted outside of the U.S. typically are administered under a three-phase sequential process similar to~~ that ~~discussed above for pharmaceutical products. Clinical trials conducted in~~ the EU must comply with the EU Clinical Trial Regulations and are monitored and inspected by each EU Member State. Clinical trials conducted in Canada must comply with the Health Canada Regulations and are approved and monitored by an independent committee of doctors, scientists, advocates and others to ensure safety and ethical standards. In addition, regulatory approval of pricing/marketing of the product candidate is ~~required~~not insafe ~~most~~or ~~countries~~effective ~~other~~for ~~than~~a ~~the~~particular ~~U.S. We face the risk that the pricing, which results from the regulatory approval process, would be insufficient to generate an acceptable return to us or our collaborators.~~ indication;

~~The~~• ~~regulatory/marketing approval~~inability ~~process~~to ~~varies~~manufacture ~~from~~sufficient ~~country~~quantities toof ~~country, and~~ the ~~approval~~product ~~time~~candidate ~~may be longer or shorter than that required~~ for ~~FDA~~use ~~approval. However, foreign countries are similar~~ in ~~that~~clinical ~~they generally require, as part of any new drug submission/application process, sufficient evidence to support the safety, efficacy and quality of the product candidate.~~trials;

33• delay or failure in obtaining approval of our clinical trial protocols from the FDA or institutional review boards;

~~Table~~• slower than expected rate of ~~Contents~~patient recruitment and enrollment;

~~Under~~• EUinability ~~regulatory~~to ~~systems,~~adequately ~~the~~follow ~~manufacture~~ and ~~sale~~monitor ofpatients ~~new~~after drugs are controlled by the EMA. MAAs are submitted under either a centralized or decentralized procedure for most products. The centralized procedure, which is the pathway for BiovaxID™, is available for medicines produced by biotechnology or which are highly innovative and provides single marketing authorization that is valid for all EU member states. Under European Commission Regulation 726/2004, the centralized authorization procedure is required for all biotechnology-derived medicinal products developed through recombinant DNA technology, controlled expression of genes coding for biologically active proteins, and hybridoma and monoclonal antibody methods. It is also required for designated orphan medicinal products and all new active substances indicated for the treatment of AIDS, cancer, neurodegenerative disorder, or diabetes. Under the EMA centralized procedure, the marketing approval of BiovaxID™ can be simultaneously obtained throughout all EU-member countries with a single MAA. As part of the EMA’s centralized procedure, the MAA is assessed by the EMA’s CHMP, which designates from within its membership, a Rapporteur and Co-Rapporteur, as well as a PRAC Rapporteur and Co-Rapporteur. The Rapporteurs and Co-Rapporteurs are assigned with the primary responsibility of preparing and delivering an approvability evaluation report, supported by a team of assessors from their National Authority.;

~~Under~~• ~~Canadian~~difficulty ~~regulatory systems, the manufacture and sale of new drugs are controlled by Health Canada. NDSs are be submitted for regulatory approval~~ in ~~Canada. Upon~~managing ~~sufficient~~multiple ~~evidence~~clinical to support safety, efficacy or quality claims for a NDS, a product is issued a Notice of Compliance (“NOC”) and a Drug Identification Number (“DIN”) indicating that the biologic is approved for sale in Canada. All drugs that are marketed in Canada are subject to the Food and Drugs Act and Regulations. The Biologics and Genetic Therapies Directorate is responsible for the review and approval of all types of drug submissions for Biological (Schedule D) and Radiopharmaceutical (Schedule C) drug products, including, but not limited to NDSs. For the regulatory requirements specific to Biological (Schedule D to the Act) drugs, please refer to Divisions 4, of Part C of the Regulations. For general regulatory requirements concerning all drugs, including Good Manufacturing Practices, please refer to Divisions 1, 1a, 2, 5 and 8 of Part C of the Regulations. sites;

~~Third-Party~~• ~~Reimbursement~~unforeseen ~~and~~safety ~~Pricing Controls~~ issues;

In• ~~the U.S. and in international markets, sales of pharmaceutical products depend in significant part on the availability of reimbursement to the consumer from third-party payers, such as~~ government and private insurance plans. Third-party payers are increasingly challenging the prices charged for medical products and services. It will be time-consuming and expensive for us to go through the process of seeking reimbursement from Medicare and private payers. Our product candidates may not be considered cost effective, and coverage and reimbursement may not be available or ~~sufficient~~regulatory todelays; ~~allow us to sell our product candidates on a competitive~~ and profitable basis. The passage of the Medicare Prescription Drug and Modernization Act of 2003 imposes new requirements for the distribution and pricing of prescription drugs which may affect the marketing of our product candidates.

In• ~~many~~clinical ~~foreign~~trial ~~markets, including~~costs ~~the member states of the EU, pricing of pharmaceutical products is subject to governmental control. In the U.S., there have been, and we expect~~ that ~~there~~are ~~will~~greater ~~continue~~than ~~to be, a number of federal and state proposals to implement similar governmental pricing control. While~~ we ~~cannot~~currently ~~predict whether such legislative or regulatory proposals will be adopted, the adoption of such proposals could have a material adverse effect on our business, financial condition and profitability~~anticipate.

~~Liability~~Even ~~Insurance~~if we achieve positive interim results in clinical trials, these results do not necessarily predict final results, and positive results in early clinical trials may not be indicative of success in later clinical trials. A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials, even after promising results in earlier clinical trials. Negative or inconclusive results or adverse medical events during a clinical trial could cause us to repeat or terminate a clinical trial or require us to conduct additional clinical trials. We do not know whether any future clinical trials will demonstrate safety and efficacy sufficiently to result in marketable product candidates. Our clinical trials may be suspended at any time for a variety of reasons, including if the FDA or we believe the patients participating in our clinical trials are exposed to unacceptable health risks or if the FDA finds deficiencies in the conduct of these clinical trials.

We may be exposed to potential product liability claims by users of our product candidates. Our business segments may expose us to potential risk of liability. We seek to obtain agreements from contract production customers to mitigate such potential liability and to indemnify us under certain circumstances. The terms and conditions of our sales and instruments include provisions which are intended to limit our liability for indirect, special, incidental or consequential damages. There can be no assurance, however, that we will be successful in obtaining such agreements or that such indemnification, if obtained, will adequately protect us against potential claims. The terms and conditions of our sales and instruments include provisions which are intended to limit our liability for indirect, special, incidental or consequential damages. We presently maintain product liability insurance coverage in the aggregate and per occurrence of $2.0 million, in connection with our product candidates and our products and services, in amounts which we believe to be adequate and on acceptable terms. 37

~~Although,~~Failures weor ~~believe~~perceived ~~that~~failures ~~our~~in ~~current level of coverage is adequate to protect~~ our ~~business~~clinical ~~from~~trials ~~foreseeable~~will ~~product~~directly ~~liability~~delay ~~claims, we may seek to increase~~ our ~~insurance coverage in the future in the event that we significantly increase our level of contract~~ product ~~and~~development ~~services~~ and~~/or~~ ~~the~~regulatory ~~initiation~~approval ~~of any clinical trial program. There can be no assurance; however~~process, ~~that~~damage ~~we will be able to maintain~~ our ~~existing~~business ~~coverage or obtain additional coverage on acceptable terms~~prospects, ormake ~~that~~it ~~such~~difficult ~~insurance~~for ~~will~~us ~~provide adequate coverage against all potential claims~~ to ~~which~~establish wecollaboration ~~may~~and bepartnership ~~exposed.~~relationships, Aand ~~successful~~negatively ~~partially~~affect orour ~~completely~~reputation ~~uninsured~~and ~~claim against~~competitive usposition ~~could~~in ~~have~~the apharmaceutical ~~material adverse effect on our operations~~community.

34If we fail to obtain regulatory and/or marketing approval of BiovaxID or any of our product candidates, we will be unable to commercialize these products.

~~Table~~Development, testing, manufacturing and marketing of ~~Contents~~pharmaceutical products are subject to extensive regulation by numerous governmental authorities in the U.S. and in other foreign countries. The process of obtaining FDA regulatory approval of pharmaceutical products is costly and time consuming. Any new pharmaceutical product must undergo rigorous preclinical and clinical testing and an extensive regulatory approval process mandated by the FDA. Such regulatory review includes the determination of manufacturing capability and product performance.

~~EMPLOYEES~~We intend to seek regulatory approval from the FDA for BiovaxID; however, we do not plan on filing a BLA in the U.S. until after the completion of our second Phase 3 clinical trial which is expected to require a number of years to complete. In addition to seeking regulatory approval from the FDA for BiovaxID, we intend to seek the regulatory and marketing approval required to market BiovaxID in the EU, Canada and potentially additional countries and territories. Marketing of BiovaxID in these countries, and in most other countries, is not permitted until we have obtained required approvals or exemptions in each Member State in the EU and each province in Canada. The approval requirements and conditions (i.e., additional development and clinical trials to satisfy regulatory requirements) which each regulatory agency may require could delay or completely frustrate approval. The regulatory approval process for any new drug or biologic, particularly including BiovaxID is considered robust, challenging and uncertain.

AsIn ~~of September 30~~addition, ~~2012,~~patient-specific weactive ~~had~~immunotherapies 43such ~~employees~~as (3BiovaxID ~~of whom~~ are ~~part time employees~~complex, and 40regulatory ofagencies ~~whom~~have ~~are~~limited ~~full~~experience ~~time~~with ~~employees)~~them. ~~Advanced~~To ~~degrees~~date, ~~and~~the ~~certifications~~FDA ofhas ~~our~~only ~~staff~~approved ~~include~~for ~~five~~marketing ~~Ph.D.s,~~two ~~one M.D.,~~active Phimmunotherapies for treating cancer.~~D.,~~ ~~one~~This ~~CPA,~~limited precedent and ~~three~~experience ~~JDs.~~may ~~From~~lengthen ~~time~~the toregulatory ~~time,~~review weprocess ~~employ~~ and ~~supplement~~impede our ~~staff~~ability ~~with~~to ~~temporary~~obtain ~~employees~~timely ~~and~~FDA ~~consultants~~approval for BiovaxID, asif ~~required.~~it Weis ~~believe~~approved ~~that~~at ~~our~~all. ~~relations~~Even ~~with~~if ~~employees~~BiovaxID ~~are~~is ~~satisfactory.~~approved ~~None~~by ofthe ~~our~~FDA, ~~employees~~the isFDA’s ~~covered~~limited byprecedent ~~a collective~~and ~~bargaining~~experience ~~agreement.~~with ~~Each~~respect ofto ~~our~~a ~~employees~~patient-specific ~~has~~active ~~entered~~idiotype ~~into~~vaccine ~~confidentiality,~~may ~~intellectual~~increase ~~property~~our ~~assignment~~development costs and ~~non-competition~~otherwise ~~agreements~~delay ~~with~~or ~~us.~~prevent commercialization.

~~Our~~There ~~ability~~can tobe ~~continue~~no toassurance ~~develop~~that ~~and~~the ~~improve~~products ~~marketable~~currently in development, or those products ~~and~~acquired toor ~~establish~~in-licensed ~~and~~by ~~maintain~~us, ~~our~~will ~~competitive~~be ~~position~~approved inby ~~light~~the ofFDA ~~technological~~or ~~developments~~any ~~will~~foreign ~~depend,~~regulatory inagency. ~~part~~In addition, ~~upon~~there ~~our~~can ~~ability~~be no assurance that all necessary approvals will be granted for future products or that regulatory review or actions will not involve delays caused by such regulatory agency’s request for additional information or testing that could adversely affect the time to ~~attract~~ market and ~~retain~~sale ~~qualified~~of ~~technical~~the ~~personnel~~products.

~~CORPORATE~~Any ~~INFORMATION~~delay in any approval or any failure to obtain approval of a product could delay or impair our ability to commercialize that product and to generate revenue, as well as increase costs for that product.

WeIf ~~are~~we ~~incorporated~~do innot ~~the~~obtain ~~State~~and ofmaintain ~~Delaware.~~regulatory/marketing ~~Our~~approval ~~principal~~of ~~executive~~our ~~offices~~product ~~are~~candidates, ~~located~~we atwill ~~324~~be ~~South~~unable ~~Hyde~~to ~~Park~~sell ~~Avenue, Suite 350, Tampa, Florida 33606, and~~ our ~~telephone~~product ~~number at that address is (813) 864-2554~~candidates. ~~Our website is www.biovest.com.~~

~~ADDITIONAL~~Changes ~~INFORMATION~~in ~~AND WHERE~~law, TOgovernment ~~FIND~~regulations ITand/or policies can have a significant impact on our results of operations. The discovery, preclinical development, clinical trials, manufacturing, risk evaluation and mitigation strategies, marketing and labeling of pharmaceuticals and biologics are all subject to extensive laws and regulations, including without limitation, the U.S. Federal Food, Drug and Cosmetic Act, the U.S. Public Health Service Act, the Medicare Modernization Act, the Food and Drug Administration Amendments Act, the U.S. Foreign Corrupt Practices Act, the Sherman Antitrust Act, patent laws, environmental laws, privacy laws and other federal and state statutes, including anti-kickback, antitrust and false claims laws, as well as similar laws in foreign jurisdictions. Enforcement of and changes in laws, government regulations and/or policies can have a significant adverse impact on our ability to commercialize our product candidates and to introduce new products to the market, which would adversely affect our results of operations.

~~Our~~If ~~Annual~~we ~~Reports~~or onour ~~Form 10-K~~agents, ~~Quarterly~~contractors ~~Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed~~ or ~~furnished~~collaborators ~~pursuant to Section 13(a) or 15(d) of the Exchange Act~~ are ~~filed~~delayed ~~with~~in the SEC. Such reports and other information that we file with the SEC are available free of charge on our website (www.biovest.com) as soon as reasonably practicable after we electronically file such material withreceiving, or ~~furnish~~are itunable to, the SEC. The public may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549, on official business days during the hours of 10:00 a.m. to 3:00 p.m. The public may obtain ~~information on the operations of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports~~all, ~~proxy~~necessary ~~and~~governmental information statements and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. The contents of these websites are not incorporated into this filing. Furtherapprovals, ~~the~~we ~~foregoing~~will ~~references~~be ~~to the~~unable ~~URLs for these websites are intended~~ to beeffectively ~~inactive~~market ~~textual~~our ~~references~~product ~~only~~candidates.

~~ITEM~~The 1Atesting, marketing and manufacturing of our product candidates requires regulatory/marketing approval, including approval from the FDA or other U.S. ~~RISK~~governmental ~~FACTORS~~authorities and other governmental authorities outside of the U.S. that perform similar roles, including the EMA, and Health Canada.

~~Statements~~The in this Annual Report on Form 10-K are not strictly historical in nature are forward-looking statements. These statements may include, but are not limited to, statements about: the timing of the commencement, enrollment, and completion of our clinical trials for our product candidates; the progress or success of our product development programs; the status of regulatory/marketing ~~approvals~~approval ~~for~~process ~~our~~presents product candidates; the timing of product launches; our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others; and our estimates for future performance, anticipated operating losses, future revenues, capital requirements, and our needs for additional financing. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” “goal,” or other variations of these terms (including their use in the negative) or by discussions of strategies, plans or intentions. These statements are only predictions based on current information and expectations and involve a number of risks ~~and uncertainties. The underlying information and expectations are likely~~ to ~~change~~us, ~~over time.~~ principally:

~~Factors~~• ~~that~~In ~~could~~general, ~~cause~~preclinical ~~actual~~tests ~~results~~and toclinical ~~differ~~trials ~~materially~~can ~~from~~take ~~what~~many isyears, ~~expressed~~and orrequire ~~forecasted~~the inexpenditure ~~our~~of ~~forward-looking~~substantial ~~statements include~~resources, ~~but~~and ~~are~~the ~~not limited~~data obtained from these tests and trials can be susceptible to varying interpretation that could delay, ~~the~~limit ~~following:~~or prevent regulatory/marketing approval;

~~Risk Related to Our Business~~ 38

We• ~~have~~Delays aor ~~history~~rejections may be encountered during any stage of ~~operating~~the ~~losses~~regulatory ~~and~~process ~~expect~~based upon the failure of the clinical or other data to ~~incur~~demonstrate ~~further~~compliance ~~losses.~~with, or upon the failure of the product to meet, a regulatory agency's requirements for safety, efficacy and quality or, in the case of a product seeking an orphan drug indication, because another designee received approval first or received approval of other labeled indications;

We• ~~have never~~Requirements ~~been~~for ~~profitable~~regulatory/marketing ~~and~~approval we have incurred significant losses and cash flow deficits. For the years ended September 30, 2012 and 2011, we reported net losses of $11.8 million and $15.3 million, respectively, and negative cash flow from operating activities of $4.3 million and $3.8 million, respectively. As of September 30, 2012, we have an aggregate accumulated deficit of $173 million and an aggregate accumulated stockholders’ deficit of $40 million. We anticipate that operations may ~~continue~~become tomore ~~show~~stringent ~~losses~~due ~~and negative cash flow, particularly with the expenses associated with our continued interim analyses and efforts~~ to ~~seek~~changes in regulatory ~~approval~~agency ~~for~~policy ~~BiovaxID™. There is no assurance that the additional required funds can be obtained on terms acceptable~~ or favorable to us, if at all. The audit opinion issued by our independent auditors with respect to our consolidated financial statements for fiscal 2012 indicates that there is substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the ~~outcome~~adoption of ~~this~~new ~~uncertainty.~~regulations Weor ~~expect to receive a similar audit opinion from our independent auditors with respect to our consolidated financial statements for the fiscal 2013.~~ legislation;

35• The scope of any regulatory/marketing approval, when obtained, may significantly limit the indicated uses for which a product may be marketed and reimbursed and may impose significant limitations in the nature of warnings, precautions and contra-indications that could materially affect the sales and profitability of the drug;

~~Table~~• Approved products, as well as their manufacturers, are subject to continuing and ongoing review, and discovery of ~~Contents~~previously unknown problems with these products or the failure to adhere to manufacturing or quality control requirements may result in restrictions on their manufacture, sale or use or in their withdrawal from the market;

~~Our~~• ~~ability~~Regulatory toauthorities ~~achieve~~ and ~~sustain~~agencies ~~profitability~~of isthe toU.S., athe ~~large~~EU, ~~degree~~Canada ~~dependent~~or onother ~~obtaining regulatory/marketing~~foreign ~~approval~~governments ~~for BiovaxID. We~~ may ~~not~~promulgate beadditional ~~successful~~regulations inrestricting ~~our~~the ~~efforts~~sale toof ~~develop and commercialize BiovaxID. We may not be successful in~~ our ~~efforts~~product ~~and even if successful~~candidates, weincluding ~~may~~specifically ~~not~~tailored berisk ~~able~~evaluation toand ~~profitably~~mitigation ~~commercialize any of our drug products.~~ strategies;

~~Our~~• ~~failure~~Guidelines toand ~~timely~~recommendations ~~repay~~published ~~principal~~by ~~due~~various ~~under~~governmental ~~certain of our secured~~ and ~~unsecured~~non-governmental ~~debt~~organizations ~~instruments~~can ~~has~~reduce ~~resulted~~the inuse ~~events~~ of ~~default pursuant to such debt instruments, which could materially and adversely affect~~ our ~~operating~~product ~~results, our financial condition, and our access to capital funding.~~ candidates;

On• ~~November~~Once ~~17, 2012, an aggregate of approximately $27.7 million in principal became due under (1)~~ a ~~secured~~product ~~convertible~~candidate ~~promissory~~receives ~~note~~regulatory/marketing ~~issued to Corps Real~~approval, ~~LLC~~we ~~(“Corps~~may ~~Real”)~~not ~~with~~market ~~an aggregate~~that ~~principal~~product ~~balance~~candidate offor ~~$3.0~~broader ~~million~~or ~~(the “Biovest~~different ~~Corps Real Note”)~~applications, (2) secured convertible promissory notes issued to Laurus Master Fund, Ltd. (in liquidation), PSource Structured Debt Limited, Valens U.S. SPV I, LLC, Valens Offshore SPV I, Ltd., Valens Offshore SPV II, Corp., and ~~Erato Corp. (collectively, “Laurus/Valens”) with an aggregate principal balance of $23.5 million (~~the ~~“Term~~FDA Amay ~~Notes”),~~not ~~and~~grant ~~(3) unsecured~~us ~~convertible~~approval ~~promissory~~with ~~notes (the~~respect ~~“Exchange Notes”) issued~~ to ~~the~~separate ~~holders~~product ofapplications ~~the~~that ~~Exit~~represent ~~Financing~~extensions ~~with an aggregate principal balance~~ of ~~$1.2~~our ~~million~~basic ~~(collectively, the “Matured Obligations”)~~technology. ~~Because~~In ~~we were unable to pay the amount due on November 17~~addition, ~~2012,~~ ~~an event of default occurred under~~ the ~~Matured~~FDA ~~Obligations.~~may Aswithdraw aor ~~result~~modify ofexisting ~~our~~approvals ~~default under the Exchange Notes issued~~ in ~~the Exit Financing, interest has begun accruing on those Exchange Notes at rate of 15% per annum. On December 19, 2012,~~ a ~~majority~~significant ofmanner ~~the~~or ~~holders~~promulgate ~~(Whitebox~~additional ~~Credit~~regulations ~~Arbitrage~~restricting Partners, LP, Whitebox Special Opportunities Fund Series B Partners, LP, Pandora Select Partners, LP, Whitebox Multi-Strategy Partners, LP, Whitebox Concentrated Convertible Arbitrage Partners, LP, (collectively, the ~~“Whitebox~~sale ~~Entities”))~~ of ~~the~~our ~~outstanding~~present ~~Exchange~~or ~~Notes~~proposed ~~issued~~product incandidates. ~~the~~The ~~Exit~~FDA ~~Financing~~may ~~commenced~~also arequest ~~breach~~that ofwe ~~contract~~perform ~~action~~additional toclinical ~~secure~~trials ~~monetary~~or ~~judgment(s)~~change ~~against us for~~ the ~~outstanding principal~~labeling ~~and interest owed to them (the “Whitebox Litigation”). With the exception~~ of ~~the~~product ~~Whitebox~~candidates ~~Litigation,~~if we ~~have~~or ~~not~~others ~~been~~identify ~~notified~~side ofeffects anafter ~~event~~our ofproduct ~~default~~candidates byare ~~the~~on ~~other holders of~~ the ~~outstanding~~market; ~~Exchanges Notes.~~ and

~~Pursuant~~• Our risk evaluation and mitigation strategies, labeling and promotional activities relating to ~~cross-default~~our ~~provisions~~product ~~contained~~candidates inas ~~certain~~well ofas our ~~other~~post-marketing ~~outstanding~~activities ~~notes~~will inbe regulated by the ~~aggregate~~FDA, ofthe ~~approximately~~Federal ~~$0.3 million~~Trade ~~and~~Commission, $4the U.~~2 million~~S. Department of Justice, ~~may~~the beDrug ~~declared~~Enforcement toAgency, bestate inregulatory ~~default~~agencies asand ~~well,~~foreign regulatory agencies and ~~were~~are ~~issued~~subject to ~~(a)~~associated ~~the~~risks. ~~Economic~~In ~~Development~~addition, ~~Authority~~individual ~~for~~states, ~~the~~acting ~~City~~through oftheir ~~Coon~~attorneys ~~Rapids~~general, ~~(“EDA”)~~have ~~and~~become active as well, seeking to regulate the ~~Minnesota~~marketing ~~Investment~~of ~~Fund~~prescription ~~(“MIF”)~~drugs under state consumer protection and ~~(b) Laurus/Valens,~~false ~~respectively~~advertising laws. We ~~have~~If ~~not~~we ~~been~~fail ~~notified~~to comply with regulations regarding the promotion and sale of anour ~~event~~product candidates, appropriate distribution of ~~default~~our byproduct ~~the~~candidates ~~EDA~~under ~~and/or~~our ~~MIF~~restricted distribution systems, prohibition on off-label promotion and the ~~standstill~~promotion ~~agreement~~of ~~(discussed~~unapproved ~~below)~~products, ~~precludes~~such ~~Laurus/Valens~~agencies ~~from~~may ~~declaring~~bring aenforcement ~~cross-default~~actions ~~under~~against ~~its~~us ~~Term~~that Bcould ~~Notes.~~inhibit our commercial capabilities as well as result in significant penalties.

~~Effective~~Other ~~November 17,~~matters ~~2012,~~that wemay ~~entered~~be ~~into a standstill agreement with Corps Real and Laurus/Valens, pursuant to which (i)~~ the ~~maturity~~subject ~~dates~~ of ~~the~~governmental Corps Real Note and the Term A Notes were extended from November 17, 2012 to January 31, 2013 and (ii) Corps Real and Laurus/Valens granted us a forbearance (until January 31, 2013) from their exercise of the rights and/or ~~remedies~~ ~~available~~regulatory toaction them under the Corps Real Note, Term A Notes and Term B Notes. The standstill agreement allows us the time and opportunity to negotiate with Corps Real and Laurus/Valens a potential restructuring of the Corps Real Note, Term A Notes, and Term B Notes. If we default under the Corps Real Note following the expiration of the period covered by the standstill agreement, Corps Real will have the right to foreclose upon its first priority security interest in all of our assets. If we default under the Term A Notes following the expiration of the period covered by the standstill agreement, Laurus/Valens (a) will have right to foreclose upon their lien on all of our assets (which iscould ~~subordinate~~adversely ~~only~~affect ~~to the security interest of Corps Real) and (b) may appoint one-third of the total membership of~~ our ~~Board~~business ~~of Directors. The outcome of the negotiations relating to the restructuring of the Matured Obligations, which may~~ include ~~the remainder of our outstanding debt, may negatively affect Accentia’s ownership interest in us and cause Accentia’s potential deconsolidation/loss of control in us.~~ :

~~Effective~~• ~~December 3,~~changes ~~2012, we issued an additional secured promissory note to Corps Real, which provides us with a revolving line of credit~~ in ~~the~~laws principal amount of up to $1.5 million (the “Corps Real LOC”). The advances under the Corps Real LOC can only be used to sustain our business operations. The Corps Real LOC accrues interest at the rate of 16% per annum and ~~matures~~regulations, onincluding ~~the~~without ~~first~~limitation, ~~anniversary~~patent, ofenvironmental, ~~the~~privacy, ~~closing~~health ofcare ~~the Corps Real LOC. The Corps Real LOC is secured by a first priority lien of all our assets~~ and ~~the~~competition ~~Laurus/Valens Term A Notes and Term B Notes are now subordinate in right of payment and priority to the payment in full of the Corps Real LOC.~~ laws;

~~Our~~• ~~liquid~~importation ~~assets~~of ~~and~~prescription ~~cash~~drugs ~~flow~~from ~~are~~outside ~~not sufficient to fully repay~~ the ~~principal owed under our outstanding debt instruments~~U.S. ~~Further,~~at ~~we cannot~~prices ~~assure our shareholders~~ that weare ~~can~~regulated ~~extend~~by ~~or restructure our Matured Obligations. We have not established access to additional capital or debt to repay~~ the ~~Matured~~governments ~~Obligations.~~of ~~Further,~~various weforeign ~~cannot assume our shareholders that we will be able to obtain needed funding to repay or restructure our Matured Obligations.~~ countries;

We• ~~have~~additional ~~limited~~restrictions ~~cash or other liquid assets~~ on ~~hand.~~interactions ~~Effective December 3, 2012, we issued an additional secured promissory note to Corps Real, which provides us~~ with ahealthcare ~~revolving~~professionals; line of credit in the principal amount of up to $1.5 million (the “Corps Real LOC”). The advances under the Corps Real LOC can only be used to sustain our business operations. The Corps Real LOC accrues interest at the rate of 16% per annum and matures on the first anniversary of the closing of the Corps Real LOC. The Corps Real LOC is secured by a first priority lien on all of our assets. Pursuant to the security agreement and the amended and restated subordination agreement issued by us under the Corps Real LOC, the Laurus/Valens Term A Notes and Term B Notes are now subordinate in right of payment and priority to the payment in full of the Corps Real LOC.

36• privacy restrictions that may limit our ability to share data from foreign jurisdictions.

~~Table~~We have incurred significant costs in our development efforts to date and may never generate significant revenue from commercial sales of ~~Contents~~BiovaxID and our product candidates, if approved.

~~During prior years, we met our cash requirements through the use of cash on hand, the sale of common stock, and loans.~~ We ~~have~~expended significant ~~outstanding~~time ~~indebtedness~~and ~~which~~funds asin ofconducting ~~September 30,~~the ~~2012,~~Phase ~~aggregated to approximately $38.~~3 ~~million.~~clinical Atrial ~~portion~~in ofBiovaxID ~~our Matured Obligations of approximately, $1.2 million matured on November 17, 2012~~ and ~~accordingly,~~ wethe ~~have~~development ~~been notified~~ of our ~~default~~other ~~under~~product ~~those debt instruments~~candidates. We ~~currently~~expect doto ~~not~~continue ~~have sufficient assets or necessary or identified sources of funding~~ to ~~repay~~expend ~~the~~significant ~~Matured~~sums ~~Obligations.~~in ~~Some of~~ our ~~debt~~development isefforts ~~secured~~of by our ~~assets~~product ~~and may make procuring additional debt or equity financing more difficult or uncertain~~candidates. ~~Furthermore,~~We ~~our~~expect ~~creditors~~to ~~may~~continue ~~be able~~ to ~~foreclose~~incur onsignificant ~~our~~operating ~~assets~~expenses ifand wecapital ~~are~~expenditures ~~unable to meet our obligations~~ as ~~they become due. In addition,~~ we are obligated to pay royalties which will reduce any future potential profit. We have entered into standstill agreements with certain of our lenders extending the debt obligations’ maturity date through January 31, 2013. :

~~Our~~• ~~ability~~conduct toclinical ~~continue present operations is dependent upon our ability to obtain significant external funding. Additional sources of funding have not been established~~trials; however, we anticipate that in the future we will seek additional financing from a number of sources , including, but not limited to, the sale of equity or debt securities, strategic collaborations, recognized research funding programs and domestic and/or foreign licensing of our product candidates. There can be no assurance that we will be successful in securing needed financing at acceptable terms, if at all. If adequate funds are not available, or if we determine it to otherwise be in our best interests, we may consider additional strategic financing options, including sales of assets or business units that are non-essential to the ongoing development or future commercialization of our product candidates, or we may be required to delay, reduce the scope of, or eliminate one or more of our research or development programs or curtail some of our commercialization efforts.

If• weconduct ~~are~~research ~~successful in procuring additional financing when required it will most likely result in our issuing additional shares~~ and~~/or~~ ~~rights~~development toon ~~acquire~~existing ~~shares of our capital stock, in the alternative it may result in our selling shares of our majority-owned subsidiary, Biovest, which we currently own,~~ and~~/or~~ ~~selling,~~new ~~licensing~~product ~~or partnering of our other assets. Accordingly, our access to additional financing when needed is anticipated to be dilutive to existing shareholders.~~ candidates;

~~If,~~• asseek ~~or when required, we are unable to repay, refinance or restructure our indebtedness under our secured or unsecured debt instruments, or amend the covenants contained therein, the lenders and~~regulatory/ormarketing ~~holders~~approvals ~~under~~for ~~such secured or unsecured debt instruments could elect to terminate their commitments thereunder cease making further loans and institute foreclosure proceedings or other actions against~~ our ~~assets.~~product Under such circumstances, we could be forced into bankruptcy or liquidation. In addition, any event of default or declaration of acceleration under one of our debt instruments could also result in an event of default under one or more of our other debt instruments. We may have to seek protection under the U.S. Bankruptcy Code from the Matured Obligations. We cannot assure our shareholders that such a proceeding, if voluntarily or involuntarily instituted, would be successful in protection our shareholders. This would have a material adverse impact on our liquidity, financial position and results of operations. candidates;

~~Our~~• ~~independent~~commercialize ~~registered public accountants have expressed substantial doubt as to~~ our ~~ability~~product tocandidates, ~~continue~~if ~~as a going concern.~~ approved;

As• ofhire September 30, 2012, we had a working capital deficit of $40.6 million. We have a significant amount of debt, approximately $27.7 million of which matured on November 17, 2012 as discussed above. We expect to continue to incur substantial net operating losses at least until BiovaxID™ receives marketing approval and acceptance, which may never occur. Continued operating losses would impair our ability to continue operations. We may not be able to generate sufficient product revenue to become profitable on a sustained basis, or at all. We have operating and liquidity concerns due to our significant net losses and negative cash flows from operations. As a result of these and other factors, our independent registered public accountants, Cherry, Bekaert and Holland, L.L.P., have indicated, in their report to our 2012 consolidated financial statements, that there is substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon generating sufficient cash flow to conduct operations and obtaining additional capital and financing. Any financing activity is likely to result in significant dilution to current shareholders. Our consolidated financial statements have been prepared assuming we will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty. We incurred net losses of $11.8 million and $15.3 million in 2012 and 2011clinical, ~~respectively. We have also experienced negative cash flows from operations for the past three fiscal years. In addition~~scientific, ~~our~~ ~~projected~~sales cash receipts from operations for fiscal 2013 are anticipated to be insufficient to finance operations without funding from other sources. Historically, we have had difficulty in meeting our cash requirements. We have, in part, met our cash requirements through proceeds from our cell culture and ~~instrument~~marketing ~~manufacturing activities, various financing transactions, the use of cash on hand, short-term borrowings (primarily from affiliates),~~ and ~~by trade-vendor credit. There can be no assurances that~~ management ~~will~~personnel; obtain the necessary funding, reduce the level of historical losses or achieve successful commercialization of product candidates. Continuation as a going concern is ultimately dependent upon achieving profitable operations and ~~positive operating cash flows sufficient to pay all obligations as they come due.~~

37 39

~~Table~~• ofidentify ~~Contents~~and license additional product candidates.

~~Our~~If ~~operating~~our ~~results~~product candidates fail in clinical trials or do not gain regulatory/marketing approval or gain regulatory/marketing approval for more restricted indications than we have anticipated, we may ~~fluctuate~~not ~~widely~~generate ~~between~~significant ~~reporting~~revenues ~~periods~~from any of our product candidates. In addition, we may continue to experience net losses for the foreseeable future, in which case our accumulated deficit will continue to increase, and we may exhaust our resources and be unable to complete the development of our product candidates. If we are unable to fund the continuing development of our product candidates or if we fail to generate significant revenues from any of our product candidates, our shareholders could lose all or part of their investment in our Company.

~~Our~~Even ~~operating~~if ~~results may vary significantly from quarter-to-quarter or year-to-year~~approved, BiovaxID depending on factors such as timing of biopharmaceutical development and commercialization of products by our customers, the timing of increased research and development and sales and marketing expenditures, the timing and size of contracts and whether we introduce to the market new products or processes. Consequently, revenues, profits or losses may ~~vary significantly from quarter-to-quarter or year-to-year, and revenue, profits or losses in any period will not necessarily~~ be ~~indicative~~subject ~~of results in subsequent periods. These period-~~to~~-period fluctuations~~ inpromotional ~~financial results may have a significant impact on the market price, if any, of our securities~~limitations.

~~Our~~We ~~business~~may ~~could~~not be ~~adversely~~ ~~affected~~able to obtain the labeling claims necessary or desirable for the promotion of our product candidates. The FDA has the authority to impose significant restrictions on an approved product through the product label and allowed advertising, promotional and distribution activities. The FDA also may approve a product for fewer indications than are requested or may condition approval on the performance of post-approval clinical studies. We may also be required to undertake post-marketing clinical trials. There may be monetary penalties if post-approval requirements are not fulfilled. If the results of such post-marketing studies are not satisfactory, the FDA may withdraw regulatory authorization or may condition continued marketing on commitments from us that may be expensive and/or time consuming to fulfill. Even if we ~~could~~receive ~~fail~~FDA and/or other foreign regulatory/marketing approvals, if we or others identify adverse side effects after any of our product candidates are ~~unable~~on tothe ~~service~~market, or if manufacturing problems occur, regulatory/marketing approval may be withdrawn and reformulation of our ~~obligations~~product ~~under~~candidates, additional clinical trials, changes in labeling of our ~~incurred~~product ~~indebtedness.~~candidates and additional regulatory/marketing applications may be required.

~~Our~~There ~~ability~~is toa ~~pay interest~~high ~~and~~risk ~~principal amounts when due or to comply with debt covenants will depend upon, among other things, continued commercial success~~ of ~~our~~failure ~~product~~because candidates, access to funding when required, the ability to enter into business or strategic relationships, and other factors that affect our future financial and operating performance, including, without limitation, prevailing economic conditions and financial, business, and regulatory factors, many of which are beyond our control. As previously discussed, on November 17, 2012, approximately $27.7 million of our debt matured and accordingly we are ~~currently~~trying into ~~default~~develop ~~under~~ a ~~portion~~new ofanti-cancer ~~those debt instruments~~vaccine.

IfWe we are ~~unable~~pursuing toa ~~generate~~novel ~~sufficient~~patient-specific ~~cash~~cancer ~~flow~~therapy. toCommercialization ~~meet~~requires ~~the~~governmental ~~debt~~approval, ~~service~~establishment ~~requirements~~of ~~under~~cost ~~our~~effective ~~incurred~~production ~~indebtedness~~capability, wedistribution ~~may~~capability beand ~~forced~~market acceptance. BiovaxID is subject to ~~take~~all ~~actions~~of ~~such~~the ~~as:~~risks of failure that are inherent in developing products based on new technologies and the risks generally associated with drug development. These risks include the possibility that:

• ~~restructuring~~our technology or ~~refinancing~~the product based on our ~~debt~~technology will be ineffective or toxic, or otherwise fail to receive necessary regulatory/marketing approvals;

• ~~seeking~~future ~~additional~~products ~~debt~~based on our technology will be difficult to manufacture on a large scale or ~~equity~~at ~~capital~~all or will prove to be uneconomical to produce or market;

• ~~reducing~~proprietary orrights ~~delaying~~of ~~our~~third ~~business~~parties ~~activities,~~will ~~acquisitions,~~prevent ~~investments~~us or ~~capital~~our ~~expenditures,~~collaborators ~~including~~from ~~research~~marketing ~~and development expenditures~~products;

• ~~selling~~third ~~assets,~~parties ~~businesses,~~will ~~products~~market superior or ~~other~~equivalent ~~potential revenue streams~~products; or

• ~~seeking~~technology ~~protection(s)~~advances ~~under~~will ~~U.S.~~render ~~bankruptcy~~our ~~laws.~~technology or product outdated or less attractive; and

~~Such~~• ~~measures~~the ~~might~~products ~~not~~will ~~be successful and might~~ not ~~enable~~attain usmarket ~~to service our obligations under our indebtedness~~acceptance. ~~In addition, any such financing, refinancing or sale of assets might not be available on economically favorable terms.~~

WeDrug ~~anticipate~~development, ~~that~~including weclinical ~~will~~trials ~~need~~required ~~substantial~~for ~~additional~~domestic ~~funding~~and inforeign ~~the~~governmental ~~future~~approval, is expensive and ifnew wedrugs ~~are~~have ~~unable~~a ~~to raise~~high ~~capital~~risk ~~when~~of ~~needed,~~failure. weBased ~~would~~on beresults ~~forced~~at toany ~~delay,~~stage ~~reduce~~of development, orincluding ~~eliminate~~later-stage clinical trials and our inability to bear the related costs associated with product development ~~programs~~or product production or ~~commercialization~~marketing, ~~efforts.~~we may decide to discontinue development or clinical trial at any time.

~~Developing~~Preparing ~~biopharmaceutical~~for ~~products,~~and ~~conducting~~processing ~~clinical~~the ~~trials~~MAA, ~~establishing~~NDS ~~manufacturing capabilities,~~ and ~~marketing~~BLA ~~developed~~for ~~products~~BiovaxID ~~is expensive. We anticipate that we~~ will ~~need~~be toexpensive ~~raise substantial~~and ~~additional~~time ~~capital~~consuming. inThe ~~the future in order to complete the commercialization of our product candidates, to continue to pursue the submission of~~ regulatory~~/marketing~~ ~~approval~~agencies ~~applications~~responses ~~in various jurisdictions, for our product candidates and~~ to ~~fund~~any ~~the~~application ~~development~~are ~~and~~uncertain ~~commercialization~~may ofbe ~~our~~rejected ~~product~~or ~~candidates. Further~~denied, weor ~~anticipate~~may ~~that~~impose ~~we will need to raise substantial~~ additional ~~capital in order to conduct the second Phase 3 clinical trial for BiovaxID™ pursuant to our formal guidance meeting with the FDA~~requirements. ~~Additional~~Such ~~sources of funding have not been established; however,~~ additional ~~financing~~requirements ismay ~~currently~~be ~~being~~expensive ~~sought from a number of sources, including the sale of equity~~ and/or ~~debt~~time ~~securities~~consuming, ~~strategic~~ ~~collaborations,~~and ~~recognized~~meeting ~~research~~these ~~funding~~additional ~~programs,~~requirements asmay ~~well~~be asdifficult ~~domestic and/~~or ~~foreign licensing of BiovaxID~~impossible.

~~Based~~We onmight ~~our current operating plans, we expect that our existing capital and cash flow from operations, together with proceeds of one or more anticipated equity financing transactions, will~~ be ~~sufficient~~unable to ~~fund~~manufacture our ~~operations~~drug ~~and~~candidates ~~development~~on ~~activities for~~ a ~~limited~~ ~~period.~~commercial ~~We have received a report from our independent auditors on our consolidated financial statements for our years ended September 30~~scale, ~~2012~~even ~~and~~if 2011, in which our auditors have included explanatory paragraphs indicating that our significant net losses and working capital deficiency cause substantial doubt about our ability to continue as a going concernapproved.

WeAssuming ~~expect~~approval ~~to seek additional financing from a number~~ of ~~sources~~BiovaxID, ~~including but not limited to public or private equity offerings~~manufacturing, ~~debt~~supply ~~financings, or corporate collaboration~~ and ~~licensing~~quality ~~arrangements.~~control Toproblems ~~the~~could ~~extent~~arise ~~that~~as we ~~raise additional funds by issuing equity securities~~, ~~our~~either ~~stockholders~~alone ~~may~~or ~~experience~~with ~~additional dilution~~subcontractors, ~~and~~attempt debt financing, if available, may involve restrictive covenants. If we raise funds through the issuance of equity securities, our current shareholders’ equity interests could be substantially diminished. If we raise additional funds through collaboration and licensing arrangements, it may be necessary to ~~relinquish~~scale-up ~~some~~manufacturing ofcapabilities ~~our~~for ~~rights~~products tounder ~~our technologies or our product candidates or grant licenses on terms that are not favorable to us~~development. We ~~cannot~~might be ~~certain~~unable ~~that~~to ~~additional~~scale-up ~~funding~~in ~~will~~a betimely ~~available~~manner ~~on acceptable terms,~~ or at ~~all.~~a Ifcommercially ~~adequate~~reasonable ~~funds~~cost. ~~are~~Problems ~~not~~could ~~available~~lead ~~from~~to ~~the~~delays ~~foregoing sources, we may consider additional strategic financing options, including sales of assets~~ or ~~business~~pose ~~units~~a ~~that~~threat ~~are non-essential~~ to the ~~ongoing~~ultimate ~~development or future~~ commercialization of ~~BiovaxID,~~our orproduct wecandidates ~~may~~and because ~~required~~us to ~~delay, reduce the scope of, or eliminate one or more of our research or development programs or curtail some of our commercialization efforts~~fail.

38Manufacturing facilities, and those of any future contract manufacturers, are or will be subject to periodic regulatory inspections by U.S. federal and state and foreign regulatory agencies and these facilities are subject to the particular regulatory agency’s quality system standards and regulations. If we or our third-party manufacturers fail to maintain facilities in accordance with the particular regulatory agency’s quality system standards and regulations, then the manufacture process could be suspended or terminated, which would harm us.

~~Table of Contents~~40

We ~~may~~currently behave ~~unable~~only toa ~~obtain~~pilot ~~necessary~~scale manufacturing facility. If approved in the EU and Canada, we anticipate that we may need additional ~~financing~~manufacturing capacity. Adding manufacturing capacity will be expensive, time consuming and subject to significant regulatory requirements.

~~The~~Because ~~capital~~we ~~requirements for our operations~~ have ~~been~~limited ~~and~~experience, ~~will~~we ~~continue~~might to be ~~significant.~~unsuccessful ~~Our~~in ~~ability~~our efforts to ~~generate cash from operations is dependent upon~~develop, ~~among~~ ~~other~~obtain ~~things,~~approval ~~increased demand~~ for, ~~our~~commercially ~~product~~produce ~~candidates and services and the successful development of direct marketing and product distribution capabilities. Our ability to obtain required funding from debt~~ or ~~equity~~successfully ~~funding~~market isBiovaxID ~~dependent on numerous factors~~ and ~~is considered uncertain. There can be no assurance that we will have sufficient capital resources to implement our business plan and we may need additional external debt and~~/or ~~equity~~any ~~financing~~of ~~to fund~~ our ~~future~~product ~~operations~~candidates.

WeThe ~~are~~extent ~~largely~~to ~~dependent~~which onwe ~~the~~develop ~~success~~and ofcommercialize BiovaxID™ and/or weany ~~may~~of ~~not~~our beproduct ~~able~~candidates towill ~~successfully~~depend ~~commercialize~~on ~~BiovaxID.~~ our ability to:

We• have expended and will continue to expend significant time, money, and effort on the development of BiovaxID and our other product candidates. We will incur significant costs and may never generate significant revenues from commercial sales of BiovaxID, if approved and our other product candidates. BiovaxID has not been approved for marketing in any jurisdiction, and it may never be commercialized. Before we can market and sell BiovaxID in the U.S., we will need to complete arequired ~~second Phase 3~~ clinical ~~trial.~~ trials;

If• ~~we fail~~obtain tonecessary ~~successfully~~regulatory/marketing ~~commercialize BiovaxID, we may be unable to generate sufficient revenue to sustain and grow our business, and our business, financial condition, and results of operations will be adversely affected.~~ approvals;

~~Before~~• ~~regulatory/marketing~~establish, ~~approval~~or ~~can~~contract ~~be sought in the U.S.~~ for ~~BiovaxID™ we must successfully complete additional clinical trials~~, ~~outcomes~~ ofrequired ~~which~~manufacturing ~~are~~capacity; ~~uncertain.~~ and

In• ~~July 2012~~establish, weor ~~conducted~~contract ~~a formal clinical meeting with the FDA in order to define the path~~ for ~~BiovaxID’s U.S. regulatory approval. Further in its guidance~~, ~~the~~sales ~~FDA required that we conduct a second Phase 3 clinical trial to complete the clinical data gained through our first Phase 3 clinical trial~~ and ~~our~~marketing ~~BiovaxID development program to support the filing of our BLA for BiovaxID~~resources. ~~We are preparing to initiate this second Phase 3 clinical trial to advance BiovaxID toward the U.S. market, subject to availability of funding.~~

~~Conducting~~We ~~clinical~~have ~~trials~~limited isexperience awith ~~lengthy,~~these ~~time-consuming,~~activities and ~~expensive~~might ~~process,~~not ~~and~~be ~~the~~successful ~~results~~in ofthe ~~these trials are inherently uncertain. The time required to complete necessary~~ clinical trials ~~is often difficult~~, ifproduct ~~not~~development ~~impossible,~~or ~~to predict~~commercialization. ~~Our commencement and rate of completion of clinical trials may be delayed by many factors, including:~~

•Competing ~~ineffectiveness~~technologies ofmay ~~our~~adversely ~~product~~affect ~~candidate or perceptions by physicians that the product candidate is not safe or effective for a particular indication;~~us.

•Rituximab ~~inability~~is tocurrently ~~manufacture~~part ~~sufficient~~of ~~quantities~~the standard of care for the ~~product~~treatment ~~candidate~~of FL. We believe that rituximab containing therapies are well accepted by both physicians and patients and may constitute a significant competitive challenge for ~~use~~our indrug ~~clinical~~candidate ~~trials;~~if approved.

•Biotechnology ~~delay~~has experienced, and is expected to continue to experience, rapid and significant change. The use of monoclonal antibodies as initial or ~~failure~~induction intherapy, ~~obtaining~~and increasingly for maintenance therapy, has become well-established and generally accepted. Products that are well-established or accepted, including monoclonal antibodies such as Rituxan®, including its expanded approval ofas a NHL maintenance therapy, may constitute significant barriers to market penetration and regulatory approval which may be expensive, difficult or even impossible to overcome. New developments in biotechnological processes are expected to continue at a rapid pace in both industry and academia, and these developments are likely to result in commercial applications competitive with our ~~clinical~~product ~~trial~~candidates. ~~protocols~~We expect to encounter intense competition from ~~the~~a ~~FDA~~number orof ~~institutional~~companies ~~review~~that ~~boards;~~offer products in our targeted application area.

•We ~~slower~~anticipate ~~than~~that ~~expected~~our ~~rate~~competitors in these areas will consist of ~~patient~~both ~~recruitment~~well-established and ~~enrollment;~~development-stage companies and will include:

• ~~inability~~healthcare ~~to adequately follow and monitor patients after treatment~~companies;

• ~~difficulty~~chemical inand ~~managing~~biotechnology ~~multiple clinical sites~~companies;

• ~~unforeseen~~biopharmaceutical ~~safety issues~~companies; and

• ~~government~~companies ordeveloping ~~regulatory~~drug ~~delays;~~discovery ~~and~~technologies.

~~• clinical trial costs that are greater than we currently anticipate.~~41

~~Even~~The ifcell weculture ~~achieve~~production ~~positive~~and ~~interim~~technology ~~results~~business inis ~~clinical~~also ~~trials,~~intensely ~~these~~competitive ~~results do not necessarily predict final results,~~ and ~~positive~~is ~~results~~ in ~~early~~many ~~clinical~~areas ~~trials~~dominated ~~may~~by ~~not~~large beservice ~~indicative of success in later clinical trials~~providers. AIn ~~number~~many ofinstances, ~~companies~~our incompetitors ~~the pharmaceutical industry~~ have ~~suffered~~substantially ~~significant~~greater ~~setbacks~~financial, ~~in advanced clinical trials~~technical, ~~even~~research ~~after~~and ~~promising~~other ~~results~~resources inand ~~earlier~~larger, ~~clinical~~more ~~trials.~~established ~~Negative~~marketing, orsales, ~~inconclusive~~distribution ~~results~~and orservice ~~adverse~~organizations ~~medical events~~than ~~during a clinical trial could cause~~ us ~~to repeat or terminate a clinical trial or require us to conduct additional clinical trials~~. WeMoreover, dothese ~~not~~competitors ~~know~~may ~~whether~~offer ~~any~~broader ~~future~~product ~~clinical~~lines ~~trials will demonstrate safety~~ and ~~efficacy~~have ~~sufficiently~~greater toname ~~result in~~recognition ~~marketable~~than ~~product~~us ~~candidates.~~and ~~Our clinical trials~~ may beoffer ~~suspended~~discounts atas ~~any time for~~ a ~~variety~~competitive of reasons, including if the FDA or we believe the patients participating in our clinical trials are exposed to unacceptable health risks or if the FDA finds deficiencies in the conduct of these clinical trialstactic.

~~Failures~~Competitors might succeed in developing, marketing, or ~~perceived~~obtaining ~~failures~~regulatory/marketing inapproval ~~our~~for ~~clinical~~technologies, ~~trials~~products, ~~will~~or ~~directly~~services ~~delay~~that ~~our product~~are ~~development~~more ~~and~~effective ~~regulatory~~or ~~approval~~commercially ~~process~~attractive than those we offer or are developing, ~~damage~~or that render our ~~business~~product ~~prospects~~candidates or services obsolete. As these companies develop their technologies, ~~make~~they itmight ~~difficult~~develop ~~for~~proprietary positions, which might prevent us tofrom ~~establish~~successfully ~~collaboration~~commercializing ~~and~~products. ~~partnership~~Also, ~~relationships~~we might not have the financial resources, ~~and~~technical ~~negatively~~expertise ~~affect~~or ~~our~~marketing, ~~reputation~~distribution ~~and~~or ~~competitive~~support ~~position~~capabilities to compete successfully in the ~~pharmaceutical~~ ~~community~~future.

39Our competitors may develop products that are less expensive, safer, or more effective, which may diminish or eliminate the commercial success of any future products that we may commercialize.

~~Table~~We ofcompete ~~Contents~~with several biopharmaceutical companies, and our competitors may:

If• wedevelop ~~fail~~product tocandidates ~~obtain~~and ~~regulatory~~market ~~and/or~~products ~~marketing~~that ~~approval~~are ofless ~~BiovaxID™~~expensive or ~~any~~more ofeffective than our ~~product candidates,~~future ~~we will be unable to commercialize these products.~~ product;

~~Development,~~• ~~testing,~~commercialize ~~manufacturing~~competing ~~and marketing of pharmaceutical~~ products ~~are~~before ~~subject~~we toor ~~extensive~~our ~~regulation~~partners bycan ~~numerous~~launch ~~governmental~~any ~~authorities in the U.S. and in other foreign countries. The process of obtaining FDA regulatory approval of pharmaceutical~~ products isdeveloped ~~costly~~from ~~and~~our ~~time consuming. Any new pharmaceutical~~ product must undergo rigorous preclinical and clinical testing and an extensive regulatory approval process mandated by the FDA. Such regulatory review includes the determination of manufacturing capability and product performance. candidates;

We• ~~intend~~initiate toor ~~seek~~withstand ~~regulatory~~substantial ~~approval~~price ~~from~~competition ~~the~~more ~~FDA~~successfully ~~for~~than ~~BiovaxID; however,~~ we do not plan on filing a BLA in the U.S. until after the completion of our second Phase 3 clinical trial which is expected to require a number of years to complete. In addition to seeking regulatory approval from the FDA for BiovaxID, we intend to seek the regulatory and marketing approval required to market BiovaxID in the EU, Canada and potentially additional countries and territories. We anticipate commencing the regulatory and marketing applications required in the EU and Canada around the same time. Marketing of BiovaxID in these countries, and in most other countries, is not permitted until we have obtained required approvals or exemptions in each Member State in the EU and each province in Canada. The approval requirements and conditions (i.e., additional development and clinical trials to satisfy regulatory requirements) which each regulatory agency may require could delay or completely frustrate approval. The regulatory approval process for any new drug or biologic, particularly including BiovaxID is considered robust, challenging and uncertain. can;

In• ~~addition, patient-specific active immunotherapies such as BiovaxID are complex, and regulatory agencies~~ have ~~limited~~ ~~experience~~greater ~~with~~success ~~them.~~in Torecruiting ~~date,~~skilled ~~the~~scientific ~~FDA~~workers ~~has~~from ~~only approved for marketing two active immunotherapies for treating cancer. This limited precedent and experience may lengthen~~ the ~~regulatory review process and impede our ability to obtain timely FDA approval for BiovaxID, if it is approved at all. Even if BiovaxID is approved by the FDA, the FDA’s~~ limited ~~precedent~~pool ~~and~~of ~~experience~~available ~~with respect to a patient-specific active idiotype vaccine may increase our development costs and otherwise delay or prevent commercialization.~~ talent;

~~There~~• ~~can~~more beeffectively nonegotiate ~~assurance that the products currently in development, or those products acquired or in~~third-~~licensed~~party bylicenses us, will be approved by the FDA or any foreign regulatory agency. In addition, there can be no assurance that all necessary approvals will be granted for future products or that regulatory review or actions will not involve delays caused by such regulatory agency’s request for additional information or testing that could adversely affect the time to market and ~~sale~~strategic ofrelationships; ~~the products.~~ and

~~Any~~• ~~delay~~take inadvantage ~~any approval or any failure to obtain approval~~ of aacquisition ~~product could delay~~ or ~~impair~~other ~~our~~opportunities ~~ability~~more toreadily ~~commercialize~~than ~~that~~we ~~product and to generate revenue, as well as increase costs for that product~~can.

IfWe wewill docompete ~~not~~for ~~obtain~~market share against large pharmaceutical and ~~maintain~~biotechnology ~~regulatory/marketing~~companies ~~approval~~and smaller companies that are collaborating with larger pharmaceutical companies, new companies, academic institutions, government agencies and other public and private research organizations. Many of ~~our~~these competitors, either alone or together with their partners, may develop new product candidates, wethat will becompete ~~unable~~with toours, ~~sell~~and ~~our product~~these ~~candidates.~~competitors may, and in certain cases do, operate larger research and development programs or have substantially greater financial resources than we do.

~~Changes~~If inour ~~law,~~competitors ~~government~~market ~~regulations~~products ~~and/or~~that ~~policies~~are ~~can~~less ~~have~~expensive, asafer ~~significant~~or ~~impact~~more oneffective than our ~~results~~potential ~~of operations. The discovery~~products, ~~preclinical~~or ~~development,~~that ~~clinical~~reach ~~trials,~~the ~~manufacturing,~~market ~~risk~~sooner ~~evaluation~~than ~~and~~our ~~mitigation~~potential ~~strategies~~product candidates, ~~marketing~~we ~~and~~may ~~labeling~~not ofachieve ~~pharmaceuticals~~commercial ~~and~~success. ~~biologics~~In ~~are all subject to extensive laws and regulations~~addition, ~~including without limitation,~~ the ~~U.S.~~life ~~Federal~~sciences ~~Food,~~industry ~~Drug~~is ~~and~~characterized ~~Cosmetic~~by ~~Act,~~rapid ~~the~~technological Uchange.S. ~~Public~~Because ~~Health~~our ~~Service~~research ~~Act,~~approach ~~the~~integrates ~~Medicare~~many ~~Modernization Act~~technologies, ~~the~~it ~~Food~~may ~~and~~be ~~Drug~~difficult ~~Administration~~for ~~Amendments~~us ~~Act,~~to ~~the~~stay ~~U.S.~~abreast ~~Foreign~~of ~~Corrupt Practices Act,~~ the ~~Sherman~~rapid ~~Antitrust~~changes ~~Act,~~in ~~patent laws,~~each ~~environmental~~technology. ~~laws,~~If ~~privacy~~we ~~laws~~fail ~~and~~to ~~other~~stay ~~federal~~at ~~and~~the ~~state~~forefront ~~statutes,~~of ~~including~~technological ~~anti-kickback~~change, ~~antitrust~~we ~~and~~may ~~false~~be ~~claims~~unable ~~laws,~~to ascompete ~~well~~effectively. asOur ~~similar~~competitors ~~laws~~may inrender ~~foreign~~our ~~jurisdictions.~~technologies ~~Enforcement~~obsolete ofby ~~and~~advances ~~changes~~ in ~~laws,~~existing ~~government~~technological ~~regulations and/~~approaches or ~~policies~~the ~~can~~development ~~have~~of anew ~~significant~~or ~~adverse~~different ~~impact~~approaches, onpotentially ~~our~~eliminating ~~ability~~the toadvantages ~~commercialize~~in our ~~product~~drug ~~candidates~~discovery ~~and~~process tothat ~~introduce~~we ~~new~~believe ~~products~~we toderive ~~the~~from ~~market,~~our ~~which~~research ~~would~~approach ~~adversely~~and ~~affect~~proprietary ~~our results of operations~~technologies.

If we orfail ~~our~~to ~~agents,~~comply ~~contractors~~with orthe ~~collaborators~~extensive ~~are~~regulations ~~delayed~~enforced inby ~~receiving~~the EMA, orHealth ~~are~~Canada, ~~unable~~the toFDA ~~obtain~~and ~~all,~~other ~~necessary~~national ~~governmental~~and ~~approvals~~international agencies, wethe ~~will~~sale ~~be unable~~of ~~to effectively market~~ our product candidates. would be prevented or delayed.

~~The~~Research, ~~testing~~pre-clinical development, ~~marketing~~clinical ~~and~~trials, manufacturing, and marketing of our product candidates ~~requires~~ are subject to extensive regulation by various national and international government authorities. We have not received regulatory/marketing approval, ~~including~~from ~~approval~~any ~~from~~regulatory ~~the~~agency ~~FDA~~BiovaxID. The orprocess ~~other~~of ~~U.S.~~obtaining ~~governmental~~EMA, ~~authorities~~Health Canada, FDA, and other ~~governmental~~required ~~authorities~~regulatory/marketing ~~outside~~approvals ofis ~~the~~lengthy ~~U.S.~~and ~~that~~expensive, ~~perform~~and ~~similar~~the ~~roles,~~time ~~including~~required ~~the~~for ~~EMA,~~such ~~and~~approvals ~~Health~~is ~~Canada~~uncertain. The regulatory/marketing approval process is affected by such factors as:

~~The~~• ~~regulatory/marketing~~the ~~approval~~severity ~~process presents a number~~ of ~~risks~~the ~~to us, principally:~~ disease;

• ~~In general, preclinical tests and clinical trials can take many years, and require~~ the ~~expenditure~~quality of ~~substantial resources, and the data obtained from these tests and trials can be susceptible to varying interpretation that could delay, limit or prevent regulatory/marketing approval~~submission;

40• the clinical efficacy and safety;

~~Table~~• the strength of ~~Contents~~the chemistry and manufacturing control of the process;

• ~~Delays or rejections may be encountered during any stage of~~ the ~~regulatory~~manufacturing ~~process~~facility ~~based upon the failure of the clinical or other data to demonstrate~~ compliance with, or upon the failure of the product to meet, a regulatory agency’s requirements for safety, efficacy and quality or, in the case of a product seeking an orphan drug indication, because another designee received approval first or received approval of other labeled indications;

• ~~Requirements for regulatory/marketing approval may become more stringent due to changes in regulatory agency policy or~~ the ~~adoption~~availability of ~~new~~alternative ~~regulations or legislation~~treatments;

• ~~The scope of any regulatory/marketing approval, when obtained, may significantly limit~~ the ~~indicated~~risks ~~uses for which a product may be marketed~~ and ~~reimbursed~~benefits ~~and~~demonstrated ~~may impose significant limitations~~ in ~~the~~clinical ~~nature~~trials; ~~of warnings, precautions~~ and ~~contra-indications that could materially affect the sales and profitability of the drug;~~

• ~~Approved~~the ~~products,~~patent asstatus ~~well as their manufacturers, are subject to continuing~~ and ~~ongoing~~marketing ~~review,~~exclusivity ~~and~~rights ~~discovery~~ of ~~previously~~certain ~~unknown~~innovative ~~problems with these~~ products ~~or the failure to adhere to manufacturing or quality control requirements may result in restrictions on their manufacture, sale or use or in their withdrawal from the market;~~.

• Regulatory authorities and agencies of the U.S., the EU, Canada or other foreign governments may promulgate additional regulations restricting the sale of our product candidates, including specifically tailored risk evaluation and mitigation strategies;42

•Any ~~Guidelines~~regulatory/marketing ~~and~~approvals ~~recommendations~~that ~~published~~we byor ~~various~~our ~~governmental~~partners ~~and~~receive ~~non~~for our product candidates may also be subject to limitations on the indicated uses for which the product candidate may be marketed or contain requirements for potentially costly post-~~governmental~~marketing ~~organizations~~follow-up ~~can~~studies. ~~reduce~~The subsequent discovery of previously unknown problems with the ~~use~~product candidate, including adverse events of ~~our~~unanticipated severity or frequency, may result in restrictions on the marketing of the product ~~candidates;~~candidate, and could include withdrawal of the product candidate from the market.

•Our ~~Once~~U.S. amanufacturing, ~~product~~labeling, ~~candidate~~storage, ~~receives~~and ~~regulatory/marketing~~distribution ~~approval,~~activities wealso ~~may~~are ~~not~~subject ~~market~~to ~~that~~strict ~~product~~regulation ~~candidate~~and ~~for~~licensing ~~broader~~by orall ~~different~~applicable ~~applications,~~regulatory ~~and~~agencies. ~~the~~Our ~~FDA~~biopharmaceutical ~~may~~manufacturing ~~not~~facilities ~~grant~~are ussubject ~~approval~~to ~~with~~periodic ~~respect~~inspection toby ~~separate~~the ~~product~~FDA, ~~applications~~the ~~that~~EMA, ~~represent~~Health ~~extensions~~Canada and the regulatory agencies of any other jurisdiction where our ~~basic~~product ~~technology.~~candidate Inmay ~~addition,~~in the ~~FDA~~future be marketed. We may ~~withdraw~~receive ornotices ~~modify~~of ~~existing~~deficiencies ~~approvals~~from inthese agencies as a ~~significant~~result ~~manner~~of orsuch ~~promulgate~~inspections. ~~additional~~Our ~~regulations~~failure ~~restricting~~or the ~~sale~~failure of our ~~present~~biopharmaceutical ormanufacturing ~~proposed~~facilities ~~product~~to ~~candidates.~~continue ~~The~~to ~~FDA~~meet ~~may~~regulatory ~~also~~standards ~~request~~or ~~that~~to weremedy ~~perform~~any ~~additional~~deficiencies ~~clinical~~could ~~trials~~result orin ~~change~~corrective ~~the~~action ~~labeling~~regulatory ofagencies, ~~product~~including ~~candidates~~the ifinterruption we or ~~others~~prevention ~~identify~~of ~~side~~marketing, ~~effects~~closure ~~after~~of our ~~product~~biopharmaceutical ~~candidates~~manufacturing ~~are~~facilities, onand ~~the~~fines ~~market;~~ and/or penalties.

•Regulatory ~~Our~~authorities ~~risk~~also ~~evaluation~~will ~~and~~require ~~mitigation~~post-marketing ~~strategies,~~surveillance ~~labeling~~to monitor and ~~promotional~~report ~~activities relating~~ to ~~our~~them ~~product~~potential ~~candidates~~adverse aseffects ~~well~~of as our ~~post-marketing~~product ~~activities~~candidates. ~~will~~The ~~be regulated by the FDA, the Federal Trade Commission, the~~ U.S. ~~Department~~Congress ofor ~~Justice,~~ the ~~Drug~~FDA ~~Enforcement~~in ~~Agency,~~specific ~~state~~situations ~~regulatory~~can ~~agencies~~modify ~~and~~the ~~foreign~~ regulatory ~~agencies and are subject to associated risks~~process. InOnce ~~addition~~approved, ~~individual~~a ~~states,~~product’s ~~acting~~failure ~~through their attorneys general, have become active as well, seeking~~ to ~~regulate the marketing of prescription drugs under state consumer protection and false advertising laws. If we fail to~~ comply with ~~regulations~~applicable ~~regarding~~regulatory ~~the~~requirements ~~promotion~~could, ~~and~~among ~~sale~~other ~~of our product candidates~~things, ~~appropriate~~result ~~distribution~~in ofwarning ~~our~~letters, ~~product candidates under our restricted distribution systems~~fines, ~~prohibition~~suspension onor ~~off-label~~revocation ~~promotion and the promotion~~ of ~~unapproved~~regulatory ~~products~~approvals, ~~such~~product ~~agencies~~recalls ~~may~~or ~~bring~~seizures, ~~enforcement~~operating ~~actions~~restrictions, ~~against~~injunctions, usand ~~that~~criminal ~~could inhibit our commercial capabilities as well as result in significant penalties~~prosecutions.

~~Other~~The ~~matters~~policies ~~that~~of all other applicable regulatory agency, may change and additional government regulations may be enacted that could prevent or delay regulatory/marketing approval of our product candidates. We cannot predict the ~~subject~~ likelihood, nature or extent of ~~governmental~~adverse government regulation that may arise from future legislation or ~~regulatory~~administrative action, ~~which~~either ~~could~~in ~~adversely~~the ~~affect~~U.S. or abroad. If we are not able to maintain regulatory compliance, we might not be permitted to market our product candidates and our business ~~include:~~could suffer.

•Distribution ~~changes~~of inour ~~laws~~product ~~and~~candidates outside the U.S. is subject to extensive government regulation. These regulations, including ~~without~~the ~~limitation~~requirements for approvals or clearance to market, ~~patent~~the time required for regulatory review and the sanctions imposed for violations, ~~environmental~~vary from country to country. There can be no assurance that we will obtain regulatory approvals in such countries or that we will not be required to incur significant costs in obtaining or maintaining these regulatory approvals. In addition, ~~privacy~~the export by us of certain of our product candidates that have not yet been cleared for domestic commercial distribution may be subject to FDA export restrictions. Failure to obtain necessary regulatory approvals, ~~health~~the ~~care~~restriction, suspension or revocation of existing approvals or any other failure to comply with regulatory requirements would impair our ability to generate revenue, increase our compliance costs, and ~~competition~~have ~~laws;~~a material adverse effect on our future business, financial condition, and results of operations.

•Because ~~importation~~the product development and the regulatory/marketing approval process for BiovaxID and/or any of ~~prescription~~our ~~drugs~~product ~~from~~candidates ~~outside~~is ~~the~~expensive ~~U.S.~~and atits ~~prices~~outcome is uncertain, we must incur substantial expenses that ~~are~~might ~~regulated~~not byresult in any viable product, and the ~~governments~~process ofcould ~~various~~take ~~foreign~~longer ~~countries;~~than expected.

•Regulatory/marketing ~~additional~~approval ~~restrictions~~of ona ~~interactions~~pharmaceutical ~~with~~product ~~healthcare~~is ~~professionals;~~a lengthy, time-consuming and expensive process. Before obtaining regulatory/marketing approvals for the commercial sale of our product candidates, we must demonstrate to the satisfaction of the applicable regulatory agencies that BiovaxID is safe and effective for use in humans. This is expected to result in substantial expense and require significant time.

•Historically, ~~privacy~~the ~~restrictions~~results ~~that~~from ~~may~~pre-clinical ~~limit~~testing ~~our~~and ~~ability~~early clinical trials often have not been predictive of results obtained in later clinical trials. A number of new drugs have shown promising results in clinical trials, but subsequently failed to ~~share~~establish sufficient safety and efficacy data to obtain necessary regulatory/marketing approvals. Data obtained from ~~foreign~~pre-clinical ~~jurisdictions~~and clinical activities are susceptible to varying interpretations, which could delay, limit or prevent regulatory/marketing approval. In addition, regulatory delays or rejections could be encountered as a result of many factors, including changes in regulatory policy during the period of product development.

WeClinical ~~have~~trials ~~incurred~~conducted ~~significant~~by ~~costs~~us inor by third parties on our ~~development~~behalf ~~efforts~~might tonot ~~date~~be ~~and~~accepted ~~may~~by ~~never~~the ~~generate~~EMA, ~~significant~~Health ~~revenue~~Canada, ~~from~~the ~~commercial~~FDA ~~sales~~or other international regulatory agencies as being a sufficient demonstration of ~~BiovaxID™~~safety, ~~and~~efficacy or statistical significance to support the acceptance, processing or approval of our applications to obtain the requisite regulatory approval to market for our product candidates. In such an event, ~~if approved~~regulatory authorities might require us to conduct additional clinical trials which would be both expensive and time consuming or in the alternative might not permit us to undertake any additional clinical trials for our product candidates.

We expended significant time and funds in conducting the Phase 3 clinical trial in BiovaxID™ and the development of our other product candidates. We expect to continue to expend significant sums in our development efforts of our product candidates. We expect to continue to incur significant operating expenses and capital expenditures as we: 43

•We ~~conduct~~have completed a single Phase 3 clinical trial for BiovaxID and the FDA has advised us that it will require a second Phase 3 clinical trial as a condition for regulatory approval. BiovaxID is considered highly personalized because it is manufactured for each patient using material obtained by biopsy from that patient. Personalized drugs are considered unique which may create regulatory uncertainty. We do not have an understanding or agreement with the EMA, Health Canada, the FDA, or other international regulatory agencies as to the adequacy of our personalized manufacturing process, or the sufficiency, design or size of the BiovaxID Phase 3 clinical trial or the appropriate design, protocol or endpoints for our second Phase 3 clinical trial. Further, we do not know the ultimate impact on the regulatory process which may result from the early stoppage of our initial Phase 3 clinical trial before all planned patients were enrolled, the appropriateness of analyzing only patients treated with BiovaxID or control which is considered a modified intent to treat population, the impact of analyzing sub-populations of the treated patients such as patients based on the characteristics of the patient’s tumor isotype or any other factor of the BiovaxID Phase 3 clinical trial. Our initial BiovaxID Phase 3 clinical trial spanned approximately eight years and the completion of a second Phase 3 clinical trial and any other required clinical trials (which could potentially require a different trial design) will likely take a significant number of years and funding which we currently do not have. The length of time for a clinical trial generally varies substantially according to the type, complexity, novelty and intended use of the product candidate. Although for planning purposes, we forecast the commencement and completion of clinical development, and have included many of those forecasts in reports filed with the SEC and in other public disclosures, the actual timing of these events can vary dramatically. For example, we have experienced delays in our clinical development program in the past as a result of slower than anticipated patient enrollment and as a result of our twice undergoing reorganization under Chapter 11 of the U.S. Bankruptcy Code. Additional delays may occur. Our rate of completion of development efforts also could be delayed by many factors: the timing of meetings with regulatory agencies; the requirements, cost and time necessary to prepare for regulatory meetings; and the time, expense and ability to satisfy requests or requirements made by regulatory agencies is uncertain and may vary depending on numerous circumstances and as a result of the analysis of available data. In addition, we may need to delay or suspend this regulatory process if we are unable to obtain additional funding when needed. Moreover, we have limited experience in vaccine development and the regulatory process.

•Risks ~~conduct~~Related ~~research~~to ~~and~~Our ~~development on existing and new product candidates;~~Industry

•Our ~~seek~~proprietary ~~regulatory/marketing~~rights ~~approvals~~may ~~for~~not adequately protect our technologies and product candidates;.

41Our commercial success will depend in part on obtaining and maintaining patent protection and trade secret protection of our technologies and product candidates as well as successfully defending these patents against third-party challenges. We will only be able to protect our technologies and product candidates from unauthorized use by third parties to the extent that valid and enforceable patents or trade secrets cover them. Furthermore, the degree of future protection of our proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage.

~~Table~~For BiovaxID, we hold the patent relating to the method of ~~Contents~~producing BiovaxID and we have filed additional patent applications for BiovaxID. There are filed patent applications for AutovaxID® as well.

•The ~~commercialize~~patent positions of life sciences companies can be highly uncertain and involve complex legal and factual questions for which important legal principles remain unresolved. No consistent policy regarding the breadth of claims allowed in such companies’ patents has emerged to date in the U.S. The patent situation outside the U.S. is even more uncertain. Changes in either the patent laws or in interpretations of patent laws in the U.S. or other countries may diminish the value of our ~~product~~intellectual ~~candidates~~property. Accordingly, ifwe ~~approved;~~cannot predict the breadth of claims that may be allowed or enforced in our patents or in third-party patents. For example:

• ~~hire~~we ~~additional~~or ~~clinical,~~our ~~scientific,~~licensors ~~sales~~might ~~and~~not ~~marketing~~have ~~and~~been ~~management~~the ~~personnel;~~first to make the inventions covered by each of our pending patent applications and issued patents;

• ~~identify~~we ~~and~~or ~~license~~our ~~additional~~licensors ~~product~~might ~~candidates.~~not have been the first to file patent applications for these inventions;

If• ~~our~~others ~~product~~may ~~candidates~~independently ~~fail~~develop insimilar ~~clinical trials~~ or doalternative ~~not~~technologies ~~gain regulatory/marketing approval~~ or ~~gain~~duplicate ~~regulatory/marketing approval for more restricted indications than we have anticipated, we may not generate significant revenues from~~ any of our product candidates. In addition, we may continue to experience net losses for the foreseeable future, in which case our accumulated deficit will continue to increase, and we may exhaust our resources and be unable to complete the development of our product candidates. If we are unable to fund the continuing development of our product candidates or if we fail to generate significant revenues from any of our product candidates, our shareholders could lose all or part of their investment in our Company. technologies;

~~Even~~• ifit ~~approved, BiovaxID™~~is ~~may~~possible bethat ~~subject~~none toof ~~promotional~~our ~~limitations.~~ pending patent applications or the pending patent applications of our licensors will result in issued patents;

We• ~~may~~our ~~not~~issued bepatents ~~able~~and ~~to obtain~~ the ~~labeling~~issued ~~claims~~patents ~~necessary or desirable for the promotion~~ of our ~~product~~licensors ~~candidates. The FDA has the authority to impose significant restrictions on an approved product through the product label and allowed advertising, promotional and distribution activities. The FDA also~~ may ~~approve~~not provide a ~~product~~basis for ~~fewer~~commercially ~~indications~~viable ~~than~~products, ~~are requested~~ or may ~~condition~~ ~~approval on the performance of post-approval clinical studies. We may also be required to undertake post-marketing clinical trials. There may be monetary penalties if post-approval requirements are~~ not ~~fulfilled.~~provide ~~If the results of such post-marketing studies are not satisfactory, the FDA may withdraw regulatory authorization or may condition continued marketing on commitments from~~ us ~~that~~with ~~may be expensive and/or time consuming to fulfill. Even if we receive FDA and/or other foreign regulatory/marketing approvals, if we or others identify adverse side effects after~~ any ofcompetitive ~~our product candidates are on the market~~advantages, or ~~if manufacturing problems occur, regulatory/marketing approval~~ may be ~~withdrawn~~challenged and ~~reformulation~~invalidated ofby ~~our product~~third ~~candidates, additional clinical trials, changes in labeling of our product candidates and additional regulatory/marketing applications may be required.~~ parties;

~~There~~• iswe amay ~~high~~not ~~risk~~develop ofadditional ~~failure~~proprietary ~~because~~technologies weor ~~are~~product ~~trying~~candidates tothat ~~develop~~are apatentable; ~~new anti-cancer vaccine.~~ or

We• are pursuing a novel patient-specific cancer therapy. Commercialization requires governmental approval, establishment of cost effective production capability, distribution capability and market acceptance. BiovaxID™ is subject to all of the ~~risks~~patents of ~~failure~~others ~~that~~may ~~are~~have ~~inherent~~an inadverse ~~developing~~effect ~~products based~~ on ~~new~~our ~~technologies and the risks generally associated with drug development~~business. ~~These risks include the possibility that:~~

~~• our technology or the product based on our technology will be ineffective or toxic, or otherwise fail to receive necessary regulatory/marketing approvals;~~44

•We ~~future~~also ~~products~~rely ~~based~~ on trade secrets to protect our technology, ~~will~~especially bewhere we do not believe patent protection is appropriate or obtainable. However, trade secrets are difficult to ~~manufacture~~protect. onWhile awe ~~large~~use ~~scale~~reasonable efforts to protect our trade secrets, our strategic partners’ employees, consultants, contractors, or atscientific ~~all~~and other advisors may unintentionally or ~~will~~willfully ~~prove~~disclose our information to competitors. If we were to enforce a claim that a third party had illegally obtained (misappropriated) and was using our trade secrets, it would be ~~uneconomical~~expensive and time consuming, and the outcome would be unpredictable. In addition, courts outside the U.S. are sometimes less willing to ~~produce~~protect ortrade ~~market;~~secrets. Moreover, if our competitors independently develop equivalent knowledge, methods, and know-how, it will be more difficult for us to enforce our patent rights and our business could be harmed.

•If ~~proprietary~~we ~~rights~~are ofnot ~~third~~able ~~parties~~to ~~will~~defend ~~prevent~~the uspatent or trade secret protection position of our ~~collaborators~~technologies and product candidates, then we will not be able to exclude competitors from developing or marketing competing products;, and we may not generate enough revenue from product sales to justify the cost of development of our product candidates and to achieve or maintain profitability.

•If we are unable to adequately protect or enforce our rights to intellectual property or secure rights to third-party ~~parties~~patents, ~~will~~we may lose valuable rights, experience reduced market ~~superior~~share, assuming any, or ~~equivalent~~incur ~~products;~~costly litigation to, enforce, maintain or protect such rights.

•Our ~~technology~~success ~~advances~~depends, ~~will~~in ~~render~~part, on our ability to obtain and enforce patents, protect trade secrets, obtain licenses to technology orowned ~~product~~by ~~outdated~~third orparties ~~less~~and ~~attractive;~~conduct our business without infringing upon the proprietary rights of others. The patent positions of pharmaceutical and biopharmaceutical companies, including ours, can be uncertain and involve complex legal and factual questions including those related to our risk evaluation and mitigation strategies. In addition, the coverage sought in a patent application can be significantly reduced before the patent is issued.

•Consequently, we do not know whether any of our owned or licensed pending patent applications, which have not already been allowed, will result in the issuance of patents or, if any patents are issued, whether they will be dominated by third-party patent rights, whether they will provide significant proprietary protection or commercial advantage or whether they will be circumvented, opposed, invalidated, rendered unenforceable or infringed by others. Further, we are aware of third-party U.S. patents that relate to, for example, the use of certain technologies and cannot be assured as to any impact to our potential products, or guarantee that our patents or pending applications will not ~~attain~~be ~~market~~involved ~~acceptance~~in, or be defeated as a result of, opposition proceedings before a foreign patent office or any interference proceedings before the U.S. Patent & Trademark Office (“USPTO”).

~~Drug~~With ~~development,~~respect ~~including~~to ~~clinical~~patents ~~trials~~and ~~required~~patent ~~for~~applications ~~domestic~~we ~~and~~have ~~foreign~~in-licensed, ~~governmental~~there ~~approval,~~can isbe ~~expensive~~no ~~and~~assurance ~~new~~that ~~drugs~~additional ~~have~~patents awill ~~high~~be ~~risk~~issued to any of ~~failure.~~ ~~Based~~the onthird ~~results~~parties atfrom whom we have licensed patent rights, or that, if any ~~stage~~new ofpatents ~~development~~are issued, ~~including~~such ~~later-stage~~patents ~~clinical~~will ~~trials~~not ~~and~~be ~~our~~opposed, ~~inability~~challenged, toinvalidated, ~~bear~~infringed ~~the~~or ~~related~~dominated ~~costs~~or ~~associated~~provide us with ~~product~~significant ~~development~~proprietary protection or ~~product~~commercial ~~production~~advantage. Moreover, there can be no assurance that any of the existing licensed patents will provide us with proprietary protection or ~~marketing,~~commercial advantage. Nor can we ~~may~~guarantee ~~decide~~that tothese ~~discontinue~~licensed ~~development~~ patents will not be infringed, invalidated or ~~clinical~~circumvented ~~trial~~by atothers, ~~any~~or ~~time~~that the relevant agreements will not be terminated. Any termination of material licenses granted to us could have a material adverse effect on our business, financial condition and results of operations.

~~Preparing~~Because ~~for~~(1) patent ~~and~~applications ~~processing~~filed in the ~~MAA~~U.S. on or before November 28, ~~NDS~~2000 ~~and~~are ~~BLA~~maintained ~~for~~in ~~BiovaxID~~secrecy ~~will~~until bepatents ~~expensive~~issue, ~~and~~(2) patent ~~time~~applications ~~consuming~~filed in the U.S. ~~The regulatory~~on ~~agencies~~or ~~responses~~after toNovember 29, ~~any~~2000 ~~application~~are not published until approximately 18 months after their earliest claimed priority date, (3) U.S. patent applications that are ~~uncertain~~not filed outside the U.S. may not publish at all until issued and (4) publication of discoveries in the scientific or patent literature often lag behind actual discoveries, we cannot be ~~rejected~~certain that we, or ~~denied~~our licensors, were the first to make the inventions covered by each of the issued patents or ~~may~~pending ~~impose~~patent ~~additional~~applications ~~requirements~~or that we, or our licensors, were the first to file patent applications for such inventions. ~~Such~~In ~~additional~~the ~~requirements~~event ~~may~~a bethird ~~expensive~~party ~~and/~~has also filed a patent for any of our inventions, we, or ~~time~~our ~~consuming~~licensors, ~~and~~may ~~meeting~~have ~~these~~to ~~additional~~participate ~~requirements~~in ~~may~~interference ~~be difficult~~proceedings before the USPTO to determine priority of invention, which could result in the loss of a U.S. patent or ~~impossible~~loss of any opportunity to secure U.S. patent protection for the invention. Even if the eventual outcome is favorable to us, such interference proceedings could result in substantial cost to us.

42Competitors have chosen and in the future may choose to file oppositions to patent applications, which have been deemed allowable by foreign patent examiners. Furthermore, even if our owned or licensed patents are determined to be valid and enforceable, there can be no assurance that competitors will not be able to challenge the validity or our patent claims in post-grant proceedings, or to design around such patents and compete with us using the resulting alternative technology. Additionally, for these same reasons, we cannot be sure that patents of a broader scope than ours may be issued and thereby create freedom to operate issues. If this occurs we may need to reevaluate pursuing such technology, which is dominated by others' patent rights, or alternatively, seek a license to practice our own invention, whether or not patented.

~~Table of Contents~~45

WeOur ~~might~~intellectual property rights will further be ~~unable~~affected toin ~~manufacture~~ways ~~our~~that ~~drug~~are ~~candidates~~difficult onto aanticipate ~~commercial~~by ~~scale,~~the ~~even~~provisions ifof ~~approved~~the America Invents Act (2011).

~~Assuming~~Enacted ~~approval~~in ofSeptember ~~BiovaxID™~~2011, ~~manufacturing,~~the ~~supply~~America ~~and~~Invents ~~quality~~Act ~~control~~is ~~problems~~the ~~could~~first ~~arise~~major asoverhaul ~~we,~~of ~~either~~the ~~alone~~U.S. orpatent ~~with subcontractors~~system since 1952, ~~attempt~~and toincludes ~~scale-up~~a ~~manufacturing~~number ~~capabilities~~of ~~for~~changes ~~products~~to ~~under~~established ~~development~~practices. WeThe ~~might~~most besignificant ~~unable~~changes include the transition to ~~scale~~a modified first-upto-file insystem, athe ~~timely~~availability ~~manner~~of ornew atpost-grant review for issued patents, various procedural changes including the third-party submission of prior art and the availability of derivation proceedings and supplemental examination, and an expanded prior commercial user rights defense to a ~~commercially~~claim ~~reasonable~~of ~~cost~~patent infringement. ~~Problems~~The ~~could~~scope ~~lead~~of tothese ~~delays~~changes orand ~~pose~~the lack of experience with their practical implementation, suggest a ~~threat~~transitional period with some uncertainty over the next few years. For example, while some provisions have already taken effect, others will take effect up to 18 months from enactment. The USPTO is still in the ~~ultimate commercialization~~process of ~~our~~publishing ~~product~~regulations ~~candidates~~concerning ~~and~~the ~~cause~~implementation usof tothe ~~fail~~America Invents Act. Several provisions of the America Invents Act will likely be tested in U.S. federal courts over time.

~~Manufacturing~~The ~~facilities,~~changes ~~and~~to ~~those~~the ofU.S. ~~any~~patent ~~future~~system ~~contract~~in ~~manufacturers, are~~the orAmerica ~~will~~Invents beAct ~~subject~~will tohave ~~periodic~~an ~~regulatory~~impact ~~inspections~~on byour ~~U.S.~~intellectual ~~federal~~property rights and ~~state~~how ~~and~~business ~~foreign~~is ~~regulatory~~conducted ~~agencies~~in ~~and~~general. ~~these~~For ~~facilities~~example, ~~are~~the ~~subject~~modified first-to-file ~~the~~system ~~particular~~places ~~regulatory~~premium ~~agency’s~~on ~~quality~~filing ~~system~~as ~~standards~~early ~~and~~as ~~regulations.~~possible Ifand weappears orto ~~our third-party~~increase ~~manufacturers~~what ~~fail~~is toavailable ~~maintain~~as ~~facilities~~prior inart, ~~accordance~~by ~~with~~changing the ~~particular~~applicable ~~regulatory~~definitions. ~~agency’s~~In ~~quality~~the ~~system~~future, ~~standards~~in addition to patents and ~~regulations~~printed publications, ~~then~~we may be required to deal with unfamiliar prior art categories such as art that is “otherwise available to the ~~manufacture~~public”. ~~process~~For ~~could~~patent beapplications ~~suspended~~filed on or ~~terminated~~after March 16, ~~which~~2013, ~~would~~we ~~harm~~may usexpect post-grant review challenges initiated up to nine months after the corresponding patent issues.

WeWhile ~~currently~~the ~~have~~America ~~only~~Invents aAct ~~pilot~~was ~~scale~~intended ~~manufacturing~~to ~~facility.~~make Ifthe ~~approved~~resolution inof ~~the~~intellectual EUproperty disputes easier and ~~Canada~~less expensive, we ~~anticipate~~may in the future have to prove that we are not infringing patents or we may ~~need~~be ~~additional manufacturing~~required ~~capacity~~to obtain licenses to such patents. ~~Adding~~However, ~~manufacturing~~we ~~capacity~~do not know whether such licenses will be ~~expensive~~available on commercially reasonable terms, ~~time~~or at all. Prosecution of patent applications, post-grant opposition proceedings, and litigation to establish the validity and scope of patents, to assert patent infringement claims against others and to defend against patent infringement claims by others will be expensive and time-consuming. There can be no assurance that, in the event that claims of any of our owned or licensed patents are challenged by one or more third parties, any court or patent authority ruling on such challenge will determine that such patent claims are valid and enforceable. An adverse outcome in such litigation or post grant proceeding could cause us to lose exclusivity relating to the subject matter delineated by such patent claims and may have a material adverse effect on our business. If a third party is found to have rights covering products or processes used by us, we could be forced to cease using the products or processes covered by the disputed rights, be subject to significant ~~regulatory~~liabilities ~~requirements.~~to such third party and/or be required to license technologies from such third party.

~~Because~~Our weintellectual ~~have~~property ~~limited~~rights ~~experience,~~will wefurther ~~might~~ be ~~unsuccessful~~affected in ~~our~~ways ~~efforts~~that toare ~~develop,~~difficult ~~obtain~~to ~~approval~~anticipate ~~for,~~by ~~commercially~~the ~~produce~~procedures orof ~~successfully market~~the ~~BiovaxID™~~foreign ~~and/or~~countries ~~any~~in ofwhich ~~our~~we ~~product~~seek ~~candidates.~~patent protection.

~~The~~Different ~~extent~~countries tohave ~~which~~different weprocedures ~~develop~~for ~~and~~obtaining ~~commercialize BiovaxID~~patents, and/ patents issued by different countries provide different degrees of protection against the use of a patented invention by others. There can be no assurance, therefore, that the issuance to us in one country of a patent covering an invention will be followed by the issuance in other countries of patents covering the same invention or that any judicial interpretation of ~~our~~the ~~product~~validity, ~~candidates~~enforceability or scope of the claims in a patent issued in one country will ~~depend~~be onsimilar ~~our~~to ~~ability~~the judicial interpretation given to: a corresponding patent issued in another country.

•The ~~complete~~uncertainty ~~required~~of ~~clinical~~patent ~~trials;~~and proprietary technology protection and our potential inability to license technology from third parties may adversely affect us.

•Our ~~obtain~~success will depend in part on obtaining and maintaining meaningful patent protection on our inventions, technologies and discoveries. The patent position of biotechnology and pharmaceutical firms is highly uncertain and involves many complex legal and technical issues. There is no clear policy involving the breadth of claims allowed, or the degree of protection afforded, under patents in this area. Our ability to compete effectively will depend on our ability to develop and maintain proprietary aspects of our technology, as well as to operate without infringing, or, if necessary, ~~regulatory/marketing~~to ~~approvals;~~obtain rights to, the proprietary rights of others. Our pending patent applications might not result in the issuance of patents. Our patent applications might not have priority over others’ applications and, even if issued, our patents might not offer protection against competitors with similar technologies. Any patents issued to us might be challenged, invalidated or circumvented and the rights created thereunder may not afford us a competitive advantage. Furthermore, patents that we own or license may not enable us to preclude competitors from commercializing products, and consequently may not provide us with any meaningful competitive advantage.

~~• establish, or contract for, required manufacturing capacity; and~~46

•Our ~~establish~~commercial success also depends in part on our neither infringing patents or proprietary rights of third parties nor breaching any licenses that we have obtained from third parties permitting us to incorporate technology into our product candidates. It is possible that we might infringe these patents or other patents or proprietary rights of third parties. In the future we might receive notices claiming infringement from third parties. Any legal action against us or our collaborative partners claiming infringement and damages or seeking to enjoin commercial activities relating to our product candidates and processes may require us or our collaborative partners to alter our product candidates, cease certain activities and/or ~~contract~~obtain ~~for~~licenses in order to continue to manufacture or market the affected products and processes. In addition, ~~sales~~these actions may subject us to potential liability for damages. We or our collaborative partners might not prevail in an action, and ~~marketing~~any ~~resources~~license required under a patent might not be made available on commercially acceptable terms, or at all.

WeThere ~~have~~are ~~limited~~many ~~experience~~U.S. ~~with~~and ~~these~~foreign ~~activities~~patents and ~~might~~patent ~~not~~applications held by third parties in our areas of interest, and we believe that there may be ~~successful~~significant litigation in the ~~clinical~~industry ~~trials~~regarding patent and other intellectual property rights. Potential future litigation could result in substantial costs and the diversion of management’s efforts regardless of the merits or result of the litigation. Additionally, ~~product~~from ~~development~~time to time we may engage in the defense and prosecution of interference proceedings before the USPTO, and related administrative proceedings that can result in our patent position being limited or ~~commercialization~~in substantial expense to us and significant diversion of effort by our technical and management personnel. In addition, laws of some foreign countries do not protect intellectual property to the same extent as do laws in the U.S., which could subject us to additional difficulties in protecting our intellectual property in those countries.

~~Competing~~We ~~technologies~~also rely on unpatented technology, trade secrets, technical know-how, confidential information and continuing inventions to develop and maintain our competitive position. Others might independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets or disclose our technology, and we may ~~adversely~~not ~~affect~~be usable to protect our rights to our trade secrets. We seek to protect our technology and patents, in part, by confidentiality agreements with our employees and contractors. Our employees might breach their existing proprietary information, inventions and dispute resolution agreements. Accordingly, these agreements may not protect our intellectual property, and our employees’ breaches of those agreements could have a material adverse effect on us.

~~Rituximab~~If iswe ~~currently~~are ~~part~~sued offor ~~the standard~~infringing ofintellectual ~~care~~property ~~for~~rights ~~the treatment~~ of ~~FL.~~third Weparties, ~~believe~~such ~~that~~litigation ~~rituximab~~will ~~containing~~be ~~therapies~~costly ~~are~~and ~~well~~time ~~accepted~~consuming, ~~by both physicians~~ and ~~patients~~an ~~and~~unfavorable ~~may~~outcome ~~constitute~~would have a significant ~~competitive~~adverse ~~challenge~~effect ~~for~~on our ~~drug candidate if approved~~business.

~~Biotechnology~~Our ~~has~~ability ~~experienced,~~to ~~and~~commercialize isour ~~expected~~product tocandidates ~~continue~~depends on our ability to ~~experience,~~sell ~~rapid~~such ~~and~~products ~~significant~~without ~~change.~~infringing ~~The~~the ~~use~~patents or other proprietary rights of ~~monoclonal antibodies~~third asparties. ~~initial~~Numerous orU.S. ~~induction~~and ~~therapy,~~foreign issued patents and ~~increasingly~~pending ~~for~~patent ~~maintenance~~applications, ~~therapy~~which are owned by third parties, ~~has~~exist ~~become~~in ~~well-established~~the ~~and~~various ~~generally~~areas ~~accepted.~~in ~~Products~~which ~~that~~we ~~are~~have ~~well-established~~products or ~~accepted~~are seeking to create products, including ~~monoclonal~~patents ~~antibodies~~relating ~~such~~to asspecific ~~Rituxan®,~~antifungal ~~including~~formulations ~~its~~and ~~expanded~~methods ~~approval~~of asusing athe ~~NHL~~formulations ~~maintenance~~to ~~therapy~~treat infections, ~~may~~as ~~constitute~~well ~~significant~~as ~~barriers~~patents relating to ~~market penetration~~serum-based vaccines and ~~regulatory~~methods ~~approval~~for ~~which~~detection ~~may~~of becancer. ~~expensive,~~The ~~difficult~~interpretation orof ~~even~~patent ~~impossible~~claims tois ~~overcome~~complex and uncertain. ~~New~~The ~~developments~~legal instandards ~~biotechnological~~governing ~~processes~~claim interpretations are ~~expected~~evolving toand ~~continue~~changing. atThus, aany ~~rapid~~significant ~~pace~~changes in ~~both~~the ~~industry~~legal ~~and~~standards ~~academia,~~would ~~and~~impact ~~these~~the ~~developments~~way ~~are likely~~that towe ~~result~~interpret inthe ~~commercial~~claims ~~applications~~of ~~competitive~~third-party ~~with~~patents in our product ~~candidates~~candidate areas. WeIn ~~expect~~addition, because patent applications can take several years to ~~encounter~~issue, ~~intense~~there ~~competition~~may ~~from~~be acurrently ~~number~~pending ofapplications, ~~companies~~unknown ~~that~~to ~~offer~~us, ~~products~~which may later result in issued patents that our ~~targeted~~product ~~application~~candidates ~~area~~may infringe. There could also be existing patents of which we are not aware that our product candidates may inadvertently infringe.

WeIf ~~anticipate~~a third party claims that ~~our~~we ~~competitors~~infringe inon ~~these~~their ~~areas~~patents ~~will~~or ~~consist~~other proprietary rights, we could face a number of ~~both~~issues ~~well-established~~that ~~and~~could ~~development-stage~~seriously ~~companies~~harm ~~and~~our ~~will~~competitive ~~include:~~position, including:

• ~~healthcare~~infringement ~~companies~~and other intellectual property claims which, with or without merit, can be costly and time consuming to litigate and can delay the regulatory approval process and divert management’s attention from our core business strategy;

• ~~chemical~~substantial ~~and~~damages ~~biotechnology~~for ~~companies~~past infringement which we may have to pay if a court determines that our product candidates or technologies infringe upon a competitor’s patent or other proprietary rights;

• ~~biopharmaceutical~~a ~~companies;~~court ~~and~~prohibiting us from selling or licensing our product candidates or technologies unless the holder licenses the patent or other proprietary rights to us, which it is not required to do;

• ~~companies~~if ~~developing~~a ~~drug~~license ~~discovery~~is ~~technologies.~~available from a holder, we may have to pay substantial royalties or grant cross licenses to our patents or other proprietary rights; and

~~The~~• ~~cell~~redesigning ~~culture production and technology business is also intensely competitive and is in many areas dominated by large service providers. In many instances,~~ our ~~competitors~~process ~~have~~so ~~substantially~~that ~~greater financial,~~it ~~technical,~~does ~~research~~not ~~and other resources and larger~~infringe, ~~more~~which ~~established~~may ~~marketing,~~not ~~sales,~~be ~~distribution~~possible ~~and~~or ~~service organizations than us. Moreover, these competitors~~ may ~~offer~~require ~~broader~~substantial ~~product~~time ~~lines~~ and ~~have greater name recognition than us and may offer discounts as a competitive tactic~~expense.

43Such actions could harm our competitive position and our ability to generate revenue and could result in increased costs.

~~Table of Contents~~47

~~Competitors~~We ~~might~~may ~~succeed~~not inbe ~~developing,~~able ~~marketing,~~to ormaintain ~~obtaining~~sufficient ~~regulatory/marketing approval for technologies, products, or services that are more effective or commercially attractive than those we offer or are developing, or that render our~~ product ~~candidates~~liability orinsurance ~~services~~to ~~obsolete.~~cover Asclaims ~~these~~against ~~companies develop their technologies, they might develop proprietary positions, which might prevent~~ us ~~from successfully commercializing products~~. ~~Also, we might not have the financial resources, technical expertise or marketing, distribution or support capabilities to compete successfully in the future.~~

~~Our~~Product ~~competitors~~liability ~~may~~insurance ~~develop~~for ~~products~~the ~~that~~biopharmaceutical ~~are~~industry ~~less~~is generally expensive, ~~safer,~~to the extent it is available at all. There can be no assurance that we will be able to maintain such insurance on acceptable terms or ~~more~~that ~~effective~~we will be able to secure increased coverage if the commercialization of our product candidates’ progress, ~~which~~or ~~may~~that ~~diminish~~existing or ~~eliminate~~future claims against us will be covered by our product liability insurance. Moreover, there can be no assurance that the ~~commercial~~ ~~success~~existing coverage of our liability insurance policy and/or any ~~future~~rights ~~products~~of indemnification and contribution that we may ~~commercialize~~have will offset existing or future claims. We maintain product liability insurance in the aggregate of $2.0 million per occurrence. We believe that this coverage is currently adequate based on current and projected business activities and the associated risk exposure. We expect a need to increase this coverage as our business activities and associated risks grow, but it may not be commercially feasible to do so. A successful claim against us with respect to uninsured liabilities or in excess of insurance coverage and not subject to any indemnification or contribution could have a material adverse effect on our future business, financial condition, and results of operations.

WeThe ~~compete~~market ~~with~~may ~~several~~not ~~biopharmaceutical~~be ~~companies,~~receptive ~~and~~to our ~~competitors~~ ~~may:~~product candidates upon their introduction.

•The biopharmaceutical products that we may develop ~~product~~may ~~candidates~~not ~~and~~achieve market ~~products~~acceptance ~~that~~among ~~are~~physicians, ~~less~~patients, ~~expensive~~health orcare ~~more~~payers, ~~effective~~and ~~than~~the ~~our~~medical ~~future~~community. ~~product;~~The degree of market acceptance will depend upon a number of factors, including

• ~~commercialize~~the ~~competing~~receipt ~~products~~of ~~before~~regulatory/marketing ~~we or our partners can launch any products developed from our product candidates~~approvals;

• ~~initiate~~limited orindications ~~withstand~~of ~~substantial~~regulatory/marketing ~~price competition more successfully than we can~~approvals;

• ~~have~~the ~~greater~~establishment ~~success~~and demonstration in ~~recruiting~~the ~~skilled~~medical ~~scientific~~community ~~workers~~of ~~from~~ the ~~limited~~clinical ~~pool~~efficacy and safety of ~~available~~our ~~talent~~product candidates and their potential advantages over existing treatment methods;

• ~~more~~the ~~effectively~~prices ~~negotiate~~of ~~third-party~~such ~~licenses and strategic relationships~~products; ~~and~~

• ~~take~~reimbursement ~~advantage~~policies of ~~acquisition~~government orand ~~other~~third-party ~~opportunities more readily than we can.~~payers;

We• ~~will compete for~~ market ~~share~~acceptance against large pharmaceutical and biotechnology companies and smaller companies that are collaborating with larger pharmaceutical companies, new companies, academic institutions, government agencies and other public and private research organizations. Many of ~~these~~patient-specific ~~competitors,~~active ~~either alone or together with their partners~~immunotherapies, ~~may develop new product candidates that will compete with ours, and these competitors may, and~~ in ~~certain~~the ~~cases~~case ~~do,~~of ~~operate larger research and development programs or have substantially greater financial resources than we do.~~ BiovaxID;

If• ~~our competitors market products that are less expensive, safer or more effective than our potential products, or that reach~~ the ~~market~~prevalence ~~sooner~~and ~~than~~severity our potential product candidates, we may not achieve commercial success. In addition, the life sciences industry is characterized by rapid technological change. Because our research approach integrates many technologies, it may be difficult for us to stay abreast of ~~the~~any ~~rapid~~side changes in each technology. If we fail to stay at the forefront of technological change, we may be unable to compete effectively. Our competitors may render our technologies obsolete by advances in existing technological approaches or the development of new or different approaches, potentially eliminating the advantages in our drug discovery process that we believe we derive from our research approach and proprietary technologies. effects;

If• wepotential ~~fail~~advantages toover ~~comply~~alternative ~~with the extensive regulations enforced by the EMA, Health Canada, the FDA and other national and international agencies, the sale of our product candidates would be prevented or delayed.~~ treatments;

~~Research,~~• ~~pre-clinical~~ability ~~development,~~to ~~clinical trials,~~produce ~~manufacturing, and marketing of~~ our product candidates ~~are~~at ~~subject~~a tocompetitive extensive regulation by various national and international government authorities. We have not received regulatory/marketing approval from any regulatory agency BiovaxID™. The process of obtaining EMA, Health Canada, FDA, and other required regulatory/marketing approvals is lengthy and expensive, and the time required for such approvals is uncertain. The regulatory/marketing approval process is affected by such factors as: price;

• ~~the~~stocking ~~severity~~and ~~of the disease~~distribution;

• ~~the~~relative ~~quality~~convenience and ease of ~~submission~~administration;

• the ~~clinical~~strength ~~efficacy~~of marketing and ~~safety~~distribution support; and

• ~~the~~sufficient ~~strength~~third-party ofcoverage ~~the~~or ~~chemistry and manufacturing control of the process;~~reimbursement.

•The ~~the~~failure ~~manufacturing~~of ~~facility~~our ~~compliance;~~product candidates to gain market acceptance could impair our ability to generate revenue, which could have a material adverse effect on our future business, financial condition and results of operations.

•Health care policy changes, including recently enacted legislation reforming the ~~availability~~U.S. healthcare system, may have material adverse effects on our commercialization of ~~alternative~~our ~~treatments;~~product candidates.

•The Patient Protection and Affordable Care Act, as amended by the ~~risks~~Health Care and ~~benefits~~Education ~~demonstrated~~Affordability Reconciliation Act, (collectively, the “PPACA”) enacted in March 2010 makes changes that could significantly impact the development and commercialization of our products. Significant measures contained in the PPACA include, for example, coordination and promotion of research on comparative clinical ~~trials;~~effectiveness of different technologies and procedures, initiatives to revise Medicare payment methodologies, such as bundling of payments across the continuum of care by providers and physicians, and initiatives to promote quality indicators in payment methodologies. The PPACA also includes significant new fraud and abuse measures, including required disclosures of financial arrangements with physician customers, lower thresholds for violations and increasing potential penalties for such violations. In addition, the PPACA establishes an IPAB, to reduce the per capita rate of growth in Medicare spending. The IPAB has broad discretion to propose policies to reduce expenditures, which may have a negative impact on payment rates for services or therapeutics, including therapeutics like BiovaxID and/or any of our product candidates. In addition to the PPACA, the effect of which cannot presently be fully quantified given its relatively recent enactment, various healthcare reform proposals have also emerged from federal and state governments. Changes in healthcare policy could substantially impact the development and commercialization of our product candidates. We cannot predict whether future healthcare initiatives will be implemented at the federal or state level or in countries outside of the U.S., in which we may do business, or the effect any future legislation or regulation will have on us. The taxes imposed by the new federal legislation and the expansion in government's role in the U.S. healthcare industry may result in decreased profits to us, lower reimbursements by payers for our product candidates or reduced medical procedure volumes, all of which may adversely affect our business, financial condition and results of operations, possibly materially.

~~• the patent status and marketing exclusivity rights of certain innovative products.~~48

44The insurance coverage and reimbursement status of newly approved products is uncertain and failure to obtain or maintain adequate coverage and reimbursement for new or current products could limit our ability to market those products and decrease our ability to generate revenue.

~~Table~~There is significant uncertainty related to the insurance coverage and reimbursement of ~~Contents~~newly approved products. The commercial success of our product candidates in both domestic and international markets is substantially dependent on whether third-party coverage and reimbursement is available for the ordering of our product candidates by the medical profession for use by their patients. Medicare, Medicaid, health maintenance organizations, and other third-party payers are increasingly attempting to contain healthcare costs by limiting both coverage and the level of reimbursement of new products, and, as a result, they may not cover or provide adequate payment for our product candidates. Our product candidates could, if approved, face declining revenues if competitor products are perceived as providing a substantially equivalent therapeutic effect at a lower cost to the payer. They may not view our product candidates as cost-effective and reimbursement may not be available to consumers or may not be sufficient to allow our product candidates to be marketed on a competitive basis. Likewise, legislative or regulatory efforts to control or reduce healthcare costs or reform government healthcare programs could result in lower prices or rejection of our product candidates. Changes in coverage and reimbursement policies or healthcare cost containment initiatives that limit or restrict reimbursement for our product candidates may cause our revenue to decline.

~~Any~~Sales ~~regulatory/marketing~~of ~~approvals that we or~~ our ~~partners~~products ~~receive for our product~~ candidates ~~may~~will ~~also~~ be ~~subject~~ tosignificantly ~~limitations~~reduced onif ~~the~~access ~~indicated~~to ~~uses~~and reimbursement for ~~which~~our ~~the~~products ~~product~~candidates ~~candidate~~by ~~may~~governmental beand ~~marketed~~other ~~or contain requirements for potentially costly post~~third-~~marketing~~party ~~follow-up~~payers ~~studies.~~is ~~The~~reduced ~~subsequent discovery of previously unknown problems with the product candidate, including adverse events of unanticipated severity~~ or ~~frequency, may result in restrictions on the marketing of the product candidate, and could include withdrawal of the product candidate from the market~~terminated.

~~Our~~Sales ~~U.S.~~of ~~manufacturing,~~our ~~labeling~~product candidates will depend, ~~storage~~in part, ~~and~~on ~~distribution~~the ~~activities~~extent ~~also~~to ~~are~~which ~~subject~~the tocosts ~~strict~~of ~~regulation~~our ~~and~~product ~~licensing~~candidates will be paid by ~~all~~health ~~applicable~~maintenance, ~~regulatory agencies.~~managed ~~Our~~care, ~~biopharmaceutical~~pharmacy ~~manufacturing~~benefit ~~facilities~~and ~~are~~similar ~~subject~~health tocare ~~periodic~~management ~~inspection~~organizations, or reimbursed by ~~the~~government ~~FDA~~health administration authorities, ~~the~~private ~~EMA~~health coverage insurers and other third-party payers. Generally, ~~Health~~in the EU, Canada and other countries outside the ~~regulatory~~U.S., ~~agencies~~the government-sponsored healthcare system is the primary payer of ~~any~~healthcare ~~other~~costs ~~jurisdiction~~of ~~where~~patients. ~~our~~These ~~product~~health ~~candidate~~care ~~may~~management inorganizations and third-party payers are increasingly challenging the ~~future~~prices becharged ~~marketed~~for medical products and services. WeAdditionally, ~~may receive~~the ~~notices~~Health Care Reform Act of 2010 ~~deficiencies~~(“Health ~~from~~Care ~~these~~Reform ~~agencies~~Act”), aswhich abecame ~~result~~effective ofin ~~such~~January 2011, ~~inspections~~has provided sweeping health care reform in the U.S., ~~Our~~which ~~failure~~may orimpact the ~~failure~~prices of ~~our~~drugs. ~~biopharmaceutical~~In ~~manufacturing~~addition ~~facilities~~ to ~~continue~~the tofederal ~~meet~~legislation, ~~regulatory~~state ~~standards~~legislatures orand toforeign ~~remedy~~governments ~~any~~have ~~deficiencies~~also ~~could~~shown ~~result~~significant interest in ~~corrective~~ ~~action~~implementing ~~regulatory~~cost-containment ~~agencies~~programs, including ~~the~~price ~~interruption~~controls, restrictions on reimbursement and requirements for substitution of generic products. The establishment of limitations on patient access to our product candidates, adoption of price controls and cost-containment measures in new jurisdictions or ~~prevention~~programs, and adoption of ~~marketing~~more restrictive policies in jurisdictions with existing controls and measures, ~~closure~~including the impact of ~~our~~the ~~biopharmaceutical~~Health ~~manufacturing~~Care ~~facilities~~Reform Act, could adversely impact our business and ~~fines~~future results. If these organizations and/ third-party payers do not consider our product candidates to be cost-effective compared to other available therapies, they may not reimburse providers or ~~penalties.~~consumers of our product candidates or, if they do, the level of reimbursement may not be sufficient to allow us to sell our product candidates on a profitable basis.

~~Regulatory~~Reimbursement ~~authorities~~in ~~also~~the ~~will~~EU ~~require~~and ~~post-marketing~~Canada ~~surveillance~~involves todecisions, ~~monitor~~applications and ~~report~~compliance towith ~~them~~various ~~potential~~Member ~~adverse~~States ~~effects~~in the instance of ~~our~~the ~~product~~EU ~~candidates.~~and ~~The~~various Uprovinces in the instance of Canada.S. Such ~~Congress~~non-centralized orreimbursement ~~the~~requirements ~~FDA~~may result in ~~specific~~delays, ~~situations can~~added ~~modify~~expense ~~the~~and ~~regulatory~~limitations ~~process~~on marketing access. ~~Once~~Outside ~~approved~~the U.S., ainternational ~~product’s~~operations ~~failure~~are togenerally ~~comply~~subject ~~with~~to ~~applicable~~extensive ~~regulatory~~governmental ~~requirements~~price ~~could,~~controls ~~among~~and other ~~things~~market regulations, ~~result~~and we believe the increasing emphasis on cost-containment initiatives in ~~warning~~the ~~letters~~EU, ~~fines~~Canada, ~~suspension~~and orother ~~revocation~~countries has and will continue to put pressure on the pricing and usage of our product candidates. Although we cannot predict the extent to which our business may be affected by future cost-containment measures or other potential legislative or regulatory ~~approvals~~developments, ~~product recalls~~additional foreign price controls or ~~seizures,~~other ~~operating~~changes ~~restrictions,~~in ~~injunctions~~pricing regulation could restrict the amount that we are able to charge for our product candidates, which could adversely affect our revenue and ~~criminal~~results ~~prosecutions.~~of operations.

The policies of all other applicable regulatory agency, may change and additional government regulations may be enacted that could prevent or delay regulatory/marketing approval of our product candidates. We cannot predict the likelihood, nature or extent of adverse government regulation that may arise from future legislation or administrative action, either in the U.S. or abroad. If we are not able to maintain regulatory compliance, we might not be permitted to market our product candidates and our business could suffer. 49

~~Distribution~~The ofavailability our product candidates outside the U.S. is subject to extensive government regulation. These regulations, including the requirements for approvals or clearance to market, the time required for regulatory review and ~~the~~amount sanctions imposed for violations, vary from country to country. There can be no assurance that we will obtain regulatory approvals in such countries or that we will not be required to incur significant costs in obtaining or maintaining these regulatory approvals. In addition, the export by us of ~~certain~~reimbursement of for our product candidates ~~that~~and ~~have not yet been cleared for domestic commercial distribution may be subject to FDA export restrictions. Failure to obtain necessary regulatory approvals,~~ the ~~restriction,~~manner ~~suspension~~in orwhich ~~revocation~~government ~~of existing approvals or any other failure to comply with regulatory requirements would impair our ability to generate revenue, increase our compliance costs,~~ and ~~have~~private apayers ~~material~~may ~~adverse~~reimburse ~~effect on~~ for our ~~future~~product ~~business,~~candidates ~~financial~~is ~~condition, and results of operations~~uncertain.

~~Because~~In ~~the~~many ~~product~~of

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